The save feature for A-Life (VMU) is: Internal Memory.
When battling two of your own chao, its not fatal. Choose battle and the game will load the two Chao onto the VMUs. Then, disconnect so you will only fight a clone of your Chaos
It does not matter if a Chao file is available. Insert the VMS into socket one of a controller. Plug the controller into port D. A Chao Puzzle will appear on the VMS screen after selecting a file.
Change the Chao's name to 1234567. Then in battle your energy will be infinite.
Obtain a Chao from Sonic Adventure. You will be asked for the next area when your Chao reaches the end of the current level. Select the desired location, then immediately press Mode. Then, press Mode(2) to return to the Chao Adventure screen. Allow the Chao to start walking and it will allow you to select the next area. This may be repeated as needed.