I have an AIX 5.3 server with oracle 10g installed on it....the output
of the "lsattr -El sys0" command shows a parameter "variable processor
capacity weight=128". What does this parameter signify, how can its
value be changed and what possible values can it take?

Looks like you have multiple LPARs (or, I guess you could have 1 LPAR)
running with a shared processor pool in uncapped mode.

Essentially, if you run multiple LPARs in uncapped mode, you can assign
a weight to them. If all partitions have equal priority, then you'd
assign the same weight to all of them (probably 128, which is the
default).

But, say you had a production partition and a test partition, and you
wanted production to have a higher priority (meaning it can use more of
the shared processor pool's clock cycles) - then you'd give it a higher
weight (Example - 64 for test and 192 for prod).

The range for the weight parameter is 0-255, and all of the things I've
mentioned (capped/uncapped, weight) are changed in the LPAR's profile
properties.