u have edit the Oracle_Sid to ur instance name under which oracle home u r creating ur DB.

say u have 2 homes...
1 for 7i series and other for 8i series...
then u wanted to create DB in 8i and presntly u have 1 instance running ... the Oracle_Sid under 8i home wud be the instance name of the running DB....u need to change this to the instance name u wish to create.....

this is required coz it makes the defualt instance as the name specified in registry....and DB assist dosent use connect string...so is required to make the changes...

u cud also achive this by chaging in environment variables to the SID name u wanted to create.

Abhay.