Ok Here We are….. Now as i Said ( or meant to said before ), i am posting my Etherchannel configuration Steps and Running Configs ( Topology Files,Net Files etc ) so you can have a Brief Review of what needs to be done to que get Basic Etherchannel Running ( no Load Balancing etc ). I have to say this is a very basic Topology i`m using meaning i will not Run Vlan Info on the Etherchannel link or anything suspicious (lol you may already know how to do that or maybe not ), so its pretty simple ( now lets Cut the chatting and start ON ).
First as i have told Before i am Using Dynamips/Dynagen Variant GNS3 (which you can get here http://www.gns3.net/ ) , to emulated Cisco Routers ( IOS you ll have to Get them yourself ).
Now the Topology Consist of 2 Multilayer Switches ( Yeah i know Dynamips does not emulate Switches ) But here is What i do:
I run 2 3640 ( Running IOS c3640-ik9s-mz.124-16 dont ask -.- ) with NM-16ESW, so we have 16 switching Ports.
Here is The Topology

ether
EtherChannel consists of individual Fast Ethernet or Gigabit Ethernet links bundled into a single logical link.
The EtherChannel provides full-duplex bandwidth up to 800 Mbps (Fast EtherChannel) or 2 Gbps (Gigabit EtherChannel) between your switch and another switch or host.
Each EtherChannel can consist of up to eight compatibly configured Ethernet interfaces. All interfaces in each EtherChannel must be the same speed, and all must be configured as Layer 2 interfaces.
This implementation comes in your Distribution Switches ( it can be used on other Squemes Althought ). You`ll need Very Fast speed in the connention Between your Distribution Switches and your Core knowing that Route FIltering, Routing information , and lots of more stuff may be running on your Layer 3 switches.
More info on EtherChannel : http://en.wikipedia.org/wiki/Etherchannel,http://www.cisco.com/en/US/docs/switches/lan/catalyst2950/software/release/12.1_9_ea1/configuration/guide/swethchl.html
Configuration Steps.
Ok now Starting With the Conf Steps ( note: in this one ill asume you know basic configurations so i will not details any commands related to ).
First on M1 lets set basic conf.
Router>enable
Router#conf terminal
Router(config)#hostname M1
M1(config)#enable secret cisco
M1(config)#ser password-encryption
M1(config)#line con 0
M1(config-line)#password cisco
M1(config-line)#login
M1(config-line)#logging syn
M1(config-line)#exec-timeout 2 0
M1(config-line)#line vty 0 15
M1(config-line)#pass cisco
M1(config-line)#login
M1(config-line)#logging syn
M1(config-line)#exec-timeout 2 0
M1(config-line)#exit
Next Setting the Switch IP Address ( Using VLAN1 ).
M1(config)#interface Vlan1
M1(config-if)#ip add 192.168.1.1 255.255.255.252
M1(config-if)#no shut
M1(config-if)#exit
Now Setting Up the Port-channel Interface ( to which we will Aggregate The Layer 2 Ports to make the Bundle and get the Speed )
M1(config)#interface port-channel 1
M1(config-if)#no shut
M1(config-if)#switchport mode access
M1(config-if)#exit
Now We have Set up the Port-channel interface its time to decide which 8 interfaces will be used and configure each interface speed and duplex.
M1(config)# interface range f0/1 – 8 ! Considering you have configure the NM-16ESW on Slot 0 of M1
M1(config-if-range)#speed 100 ! Fast ethernet interfaces maximun speed lol
M1(config-if-range)#duplex full ! no need to explain this -.-
M1(config-if-range)#switchport mode access
M1(config-if-range)#channel-group 1 mode on ! mapping interfaces to Group 1 and setting them on. You should see interfaces added to po1 ( they might say…Joined portchannel Po1 ).
M1(config-if-range)#no shut
This done we have already setup a 800mbps Interface ( configured Basic Etherchannel ) issue a show interfaces port-channel 1 and you should see that the BW says 80000Kbit. Now we have to Set up M2 doing exactly as we did here just variying some stuff.
M2 Basic Conf.
Router>enable
Router#conf terminal
Router(config)#hostname M2
M2(config)#enable secret cisco
M2(config)#ser password-encryption
M2(config)#line con 0
M2(config-line)#password cisco
M2(config-line)#login
M2(config-line)#logging syn
M2(config-line)#exec-timeout 2 0
M2(config-line)#line vty 0 15
M2(config-line)#pass cisco
M2(config-line)#login
M2(config-line)#logging syn
M2(config-line)#exec-timeout 2 0
M2(config-line)#exit
Next Setting the Switch IP Address ( Using VLAN1 ).
M2(config)#interface Vlan1
M2(config-if)#ip add 192.168.1.2 255.255.255.252
M2(config-if)#no shut
M2(config-if)#exit
Now Setting Up the Port-channel Interface.
M2(config)#interface port-channel 1
M2(config-if)#no shut
M2(config-if)#switchport mode access
M2(config-if)#exit
Now We have Set up the Port-channel interface its time to decide which 8 interfaces will be used and configure each interface speed and duplex.
M2(config)# interface range f0/1 – 8
M2(config-if-range)#speed 100
M2(config-if-range)#duplex full
M2(config-if-range)#switchport mode access
M2(config-if-range)#channel-group 1 mode on
M2(config-if-range)#no shut
Ok Now we have Set up Basic Etherchannel on Both Switches, if you issue a show interfaces port-channel 1 as i said before you should see the BW and realize Etherchannel is on, you should be able to ping M1 and M2 VLAN1 Interface IP so there is Com between them. Ok its the same when you use Gigabit Ethernet interfaces the difference is the Quantity of Interfaces you ll be able to use ( Up to 2gbps ). There are other Factors to consider like the operation Modes of etherchannel ( on,desirable,auto…..load balancing ),PaGP ( Port aggregation Protocol ),and whole lot Stuff but this Post is only mine and who knows maybe yours Quick Reference to Etherchannel basic Conf.
Every Futher Study ( Which i need to Forfill Totally cause it is a CCIE R&S Objective :d:d ) is on Cisco Web page, in this configuration Guide:http://www.cisco.com/en/US/docs/switches/lan/catalyst2950/software/release/12.1_9_ea1/configuration/guide/swethchl.html.