Cisco makes the 2900, 3500xl, and 2950 switches for OSI layer 2 functionality only. These switches cannot perform layer 3 functions (mainly routing).
The purpose for these layer2 switches is to segregate a broadcast domain into many broadcast domains (make one network into many). The switch doesn't care about what the networks actually do, but basically allows them to operate together but separatly. The switch does this, by creating VLANs and assigning ports to those VLANs.
With layer 3 switches, you define an interface for every VLAN you have in your VLAN database. You then apply layer 3 network addresses and setup (optional) routing capabilities for each VLAN. You cannot do these functions on your layer2 switch.
For layer 2 switches, you should only define one interface for management purposes only (telnet, snmp, etc.). There is no need to define more than one interface, and the switch won't allow you to activate more than one.
You can still use multiple vlans on a layer2 switch. You just won't be able to route between the different VLANs (broadcast domains / networks). When you are ready for routing, you will have to add a router or a layer3 switch to your layer 2 network.
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