Last week I started the C25K program. I am doing that M-W-F and Tue and Thur I am doing walk away the pounds and then taking Sat and Sunday off. My question is should I divide up my rest days or does it not really matter?

I don't know if it REALLY matters. You're working out 5 days a week, which is great.

However, I personally would want to spread them out, because if I take more than one day off I lose my momentum a bit. But that's just me personally. If you like having two days to re-charge, more power to you.

I personally have one rest day on sundays, but a sat-sun is nuce bc you have time to really recover. one thing though, maybe try a circut on tu-th that would be more toning? You might get a more diverse fitness from it.

I also started C25K last week My "plan" is to train for that MWF and continue weight training at the gym T&R. However, I missed my running day friday so I had to do it yesterday and went to the gym today with my boyfriend because he was in town, lol.
I personally love weight training. I can see a difference in my muscle definition and can't wait until the running/dieting takes the pounds off to reveal more of that
I like the idea of weekends off because I work weekends and often come home tired anyway.

Same here. Every time i take more than a day off at a time, I fall off the exercise wagon. I've come to know myself well enough to know that I must spread out my off days. I'm doing C25K Sun/Tue/Thur with weight training Mon/Wed. Friday is my off day and Saturday is kind of a wild card day where I pick any exercise, but I have to do something(this past week I did weight training on Saturday b/c I skipped Monday).

What kind of weight training should I do? I've only got a pair of 5lbs hand weights to use. I know I can do squats and lunges for my legs. Is one time of weight exercise per muscle group enough or should I do more than that?