I created my entities then closed the model. that was problem number one.
problem number two, is that the books says, right click on Classes, Add New File, pick managed Object class, walk through the dialog.
Managed Object doesn’t appear.
Ok, went back, found this http://developer.apple.com/iphone/library/documentation/DataManagement/Conceptual/iPhoneCoreData01/Articles/03_ManagedObject.html#//apple_ref/doc/uid/TP40008305-CH102-SW1
read it. reopened model, SELECTED THE ENTITY, right clicked on Classes. still no Managed Object template.
THEN chose FILE from top level XCODE menu, picked add file, and voila, there was the Managed Object template.
So there went an hour and a half.