named dir belongs in /var
named.conf belongs in /etc

after starting the named service you sould be able to query it by saying
	nslookup vm.example.org
provided this name server has the address 192.168.0.1 and the host doing the look up has the proper resolv.conf (ie nameserver 192.168.0.1)

see /var/named/named.example.org for more details