This problem does not really have to do with yum it has to do with the
documentation for the stateless project.

On page 2: Setting up the server, the text to add to the server says...
[StatelessLinux] 
name=Stateless Linux
baseurl=http://people.redhat.com/dmalcolm/stateless

When I try to run the command below in the instructions:
yum install readonly-root stateless-server

I get the error:
Package readonly-root-0.10-1.i386.rpm is not signed

Needed to add the line on the repo file I made.
gpgcheck=0