Do you have the plugins setup so that there's at least 1 VMS unit in the player 1 controller? If you do, then you can use the Dreamcast BIOS to format/empty it. It should then be available for you to save games to it.
In case you needed it, start Chankast, and in the menu list, click the 3rd one over labeled "plugins," then "configure." In the window that appears, you can set what devices are plugged into each port. Simply click the button to bring up a drop down menu, and select any of the VMU devices on the list (making sure you're doing this on controller 1 in port A. I put some VMU units on controller 2 in port B, and I can't access them from in-game).
Does this help at all? Once you have a VMU unit in controller 1 in port A, then you can access it from in-game, and from the BIOS. If you need to format or alter the VMU, simply select the VMU icon from the BIOS, then select the VMU from the menu. Push buttons until you figure out what to do. There's only like, 2 or 3 options, so it should be easy enough to figure out from that point.
Hope that helps some. Sorry it's not more in-depth. I haven't needed to do much with the VMU because it was all setup when I downloaded Chankast. Mouser X over and out.