Our install of RAD has a 5.1 application server installation option. Once you install that, you then need to run the mother of all patches (available from within WSAD) which takes hours and hours to download. So start the download when you leave for the day.
I believe you are on to the problem Kameron. When I start a new "Dynamic Web Project" and click the "Show Advanced" button, there is a "Target server" list. Unfortunately, the only server in the list is WebSphere Application Server v6.0. I can click the "New" button beside this list but that brings up another window with v6.0 as the only available IBM target.