Here's an example of how you can get this to work. (It's probably worth copying this code into a code editor so that you can see it clearly.)
First of all the PHP file:
?php
	include_once '../vLIB/vlibTemplate.php';
	$tmpl = new vlibTemplate'./news.tmpl;
	$cnx = mysql_connect 'localhost', ***, ***
	mysql_select_db'released_test', $cnx;
	$sql1 = 'SELECT code,description FROM table1'; // get the categories
	$result1 = mysql_query $sql1, $cnx;
	$tmpl-newLoop'NEWS'; // name of outer loop
	while $row1 = mysql_fetch_assoc$result1 
  //inner loop
  $sql2 = "SELECT page, headline,story FROM table2 WHERE page= ". $row1code.";
  $result2 = mysql_query$sql2, $cnx;
  $innerloop = array;
  while $row2 = mysql_fetch_assoc$result2 
  	$innerloop = array'page'=$row2'page','headline'=$row2'headline','story'=$row2'story';
  
  // Add row WITH inner loop to vlibTemplate
  $row_to_add = array 
      'code'=$row1'code', // from table 1
      'description'=$row1'description', // from table 1
      'stories' = $innerloop // from table 2 innerloop is called stories
      ;
  $tmpl-addRow$row_to_add, 'NEWS';
	
	$tmpl-addLoop'NEWS';
	$tmpl-pparse;
?
.. and a very simple template will look like:
html
body
tmpl_loop name=NEWS
	tmpl_var name=descriptionbr /
	------------------------------br /
  tmpl_loop name=stories
  	btmpl_var name=headline/b - tmpl_var name=storybr /
  /tmpl_loop
  br /br /
/tmpl_loop
/body
/html
I hope this helps! If not then let me know!
Kind regards,
Kelvin