Extruding Bones makes rigging confusing

This point may have been made already, but I am having a hard time sifting through the many posts that mention armatures, rigs, bones, extrusion so I am going to ask it maybe for another time.

I am working with the book Introducing Character Animation with Blender, Pages 144-?.
I am using blender 2.48a, if that matters.

Specifically on page 144 Tony Mullen instructs the reader to extrude a bone from the tip of the Spine.4 bone (the last bone in the chain of previously extruded bones that make up the spine) and rename it UpperBody.

UpperBody is then to be reparented to another bone called Torso, which is located around the pelvis.

What I notice is this:
A. UpperBody is still connected to the spine.
B. There is no dotted line showing a Parent/Child relationship between UpperBody and Torso, although the pic in the book shows one.
C. Since the Bones are not part of the same Armature set I am unable to select Torso in the child of drop down menu for UpperBody when it edit mode.
D. When I move Torso the whole spine and UpperBody moves, which makes it seem like the parenting stuck, but is this what I want, or are UpperBody and Toso supposed to be disconnected from the spine?
E. Later on that same page when I am asked to Extrude another bone from Spine.4 and name it Shoulders then reparent it to UpperBody the two bones become one big mess of overlapped structure. That does not seem right at all, but nothing I do seems to fix that.

I am concerned that I am not doing this right and that it will cause me problems down the line once I have spent hours building this rig.

So is extrusion and reparenting the way to go here, or should I make a new armature in object mode every time I want to add a new bone that is being used for control? (such as the Shoulders, UpperBody, Torso, etc…) and then should I make a correlating bone, such as Spine.4 the child of a control bone, such as UpperBody?

As I said I am a bit confused. This is a great book, but the in depth explanation about why things are being done seems to be lacking a bit. That I do not know what has changed from version 2.46 (i believe is the focus of this book, and 2.48a of even 2.49)

If anyone can help me to clear this up that would be great.

Thanks

All of your bones should be part of the same armature. I went through that book a while ago and I don’t think he ever tells you to create a seperate armature.

If you put a .blend up I can take a look at it.

alright, that makes sense. I will try adding the other bones in edit mode instead of object mode, that way they are all part of the same armature. If I run into any issues I will upload the .blend. thanks again.

I started rigging in edit mode only. Seems to be working better, but the only issue is the Mirrored extrusions. Tony makes it sound like once you make a pair of bones by mirror extrusion that all other extrusions from those bones will also be mirrored. I am not having any luck with that. any tips are welcome, otherwise I can just select the two tails of the bones in question and extrude and then using the transform properties tab I can put them in the same relative position.

Well, one step closer to understanding this system.

here is a link if anyone is curious and wants to play
http://www.mediafire.com/?zwmazjmjjmk