Hap,
Key turned to the left is "Service". Straight up and down is "Run". Turned to the right is "Locked". If the panel extended over the drive bays, in the locked position the panel can't be opened. I don't recall if "locked" also inhibits keyboard/mouse input.
The rear panel has to be locked or the server won't run.
Generally, I keep the key in the run position, and use the power button to turn the machine on.
Here's a link to the setup guide:
http://www.erik.co.uk/ans/Setting_Up_Network_Server.pdf
It talks about the key positions and what they control in a couple different places. That site has a lot of ANS info, including a troubleshooting guide, RAID setup and other instructions. I really need to archive this
I have a full set of ANS software including the AIX update, so let me know if you need anything. I also have a running ANS if you need me to test anything out.
Generally, I keep the key in the run position, and use the power button to turn the machine on.