rihtak wrotecan the open vpn be placed any where in the topology
Essentially, your server can go anywhere, it does not have to be a LAN gateway, it can just be another LAN client.
rihtak wrotecan any one help/guide me how to set up a open vpn server in ubuntu
The HOWTO has all you need (almost):
HOWTO: For OpenVPN Community Edition
When you have something setup just ask again if you cannot get it working.
(With configs and logs)