Nobody should be installing V5R4 now; it went out of marketing a year and a half ago. But there is no “best way”. It depends on many circumstances. The Information Center is where you find discussions of install methods. See Installing, upgrading, or deleting i5/OS and related software for options. — Tom

and how about if we want to upgrade an existing version.Does automatic installation refer the best way for it!

Does automatic installation refer the best way for it!
 
For upgrades at many sites, it does. For other sites, it doesn’t. It depends on what you already have installed and everything that you want to do during the upgrade. Each site sets its own objectives.
 
The upgrade process isn’t a big problem whether manual or automatic. The Information Center topic should be read to learn what to do.
 
The big problem is being sure that you have V5R4 license keys for all software LPPs before upgrading anything. If all of your needed LPPs can’t be licensed (and IBM might not be supplying licenses now), then there should be a plan to upgrade to i 6.1 within a few weeks.
 
Tom

Thanks Tom!

Questions? 1.Are you installing for the first time to new hardware?  2.If upgrading a current system,what release are you currently at? REF:  http://publib.boulder.ibm.com/infocenter/iseries/v5r4/index.jsp?topic=%2Frzahc%2Frzahc1.htm