you are speaking of sites  aka WSS sites in the portal? normally you would
create an area.. which is done with "manage portal  site".

You cannot setup a new top-level site via the SPS user interface that is
only one level deep. You must always give  a named site in a managed
path. You can setup a wildcard included managed path in Central
Administration called marketing and create
http://Portal/marketing/newsite. While creating  a new child site at
http://Portal/marketing is programmatically possible, it is outside of
Portal Server's expectation to have Areas only, it is likely to have
unknown consequences, and will not be a native part of the navigation.

I wouldn't do it.

When I was in Bill English’s class a few weeks ago,
Bill showed us a way to remove the default /sites
directory and in turn allow sites  to be created  by
users under the main portal. I don’t remember the
exact process though. Bill mentioned in class that
there are repercussions to doing this, “the Add Link
button in the Manage Sites to be Crawled list is also
removed” as a result. I also found this at the
Mindsharp blog site
(mindsharpblogs.com/.../687.aspx).
I would just like to find the exact process of doing
this. Can anyone help?

You can delete the sites  directory, but you'll lose some of the default
functionality of the sites directory. You can always create new sites
under the sites managed path, but in the absence of a sites directory,
I'm not sure how you would do this.

Another alternative is you can change where sites  are created, so for
example you could make it http://portalname/teams/marketing.

That also has a few repercussions, but may better suit your needs. I
would have to go hunt down the documentation on how to do it, so reply
back if you are interested.

I am particularly interested in how to remove all urls
in between the portal  site and the teamsite.
For example, I would like to have the ability to
create a team site under http://portalname/marketing,
without the /sites, /teams, or any other directory
between the portal name and the teamsite name. If you
have any insight and/or documentation on this, I
appreciate you posting it.

"Sites" or "personal" are managed paths that are hard-coded into the product. Not only can you not remove them, you *won't want* to remove them. They provide a new virtual root at which many, many new site collections can be created.

Sorry, I was just throwing out another possible solution since you can't
remove that containing bucket for sites.

WSS Central Admin --> Configure Virtual Server Settings --> virtserver --> Define Managed Paths --> Add a New Path.

When you create a site in the future, it will provide the new path in the drop-down.

Like portal.foo.bar/sales/admin and portal.foo.bar/CIO/admin

corporate wide sites  still use the /sites managed path and mysites use the /personal managed path

not sure if this would help, but that's how we do it!