Differences between inband and outband management IP

Hi All
What is the difference between inband mgmt IP and outband mgmt IP 
and How could I configure the inband as when I tried to configure it I received the following error:
vlan"xyz"resolved to unsupported vlan ID 
as in attached
BTW the procedure I used to create inband mgmt IP
1- create vlan group includes all vlans created globally (vlan of data traffic and mgmt traffic)
2- modify the inband profile from the LAN tab to be: 
    Inband vlan group: the created in point 1
    Network: vlan of data traffic
3- from service profile of certain server I changed the inband mgmt with static IP ( in the range of data traffic vlan) and use the network of data traffic vlan
Thanks in advance

Thanks Walter
You are very helpful
I tried the procedure you provide me with
The management IP range 192.168.2.0/24 vlan 2
the data traffic IP range 192.168.3.0/24 vlan 3
I tried to use different IP range(192.168.4.0/24 vlan 4)  for inband management IP and I can open the inband KVM but the VMs on the server could not be accessed (the uplink ports are trunk for vlan 3,4) and the ports in the core SW are trunk for vlan 3,4 also.
also I tried the same range of data traffic but I could not open the KVM inband and the error of vlan"xyz"resolved to unsupported vlan ID  appeared again 
so any advice 
thanks in advance
Amr

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