I would highly advise against sharpening an iaito (unsharpened katana) for the following reasons.
1st: Sword sharpening isn't something you can pick up from a forum or article. If you don't know what you are doing, you will most likely damage the sword irreparably and/or slice your finger off in the process.
2nd: Iaito are not made for contact use. They are often made of non-steel alloys to lighten the blade and prevent rust. If you use it, it will break
3rd: Even if it is steel, it was probably poorly tempered. This means that even if you give it an edge, the thing will get dull by cutting air (it is too soft), break (too hard or too brittle), or both (just bad workmanship).
If for some reason you believe this to be a good sword that the smith never got around to sharpening (ie: you got it from a smith whom you trust both in honesty and skill), then you might be able to find someone who will teach you or do it for you. A traditional sharpening will cost hundreds or even thousands, but there are people out there who do it for less. Good luck on finding one who is both good and reasonably priced.
Sorry that I cannot help you further, but this is as far as my knowledge extends.
Best of luck
Fencing Club at UH