This has been discussed here many times. The ASPNET userid doesn't have permission to create an event source in ASP.NET v1.1 (the book was written for 1.0).
The readme.htm file in the code download tells you to change machine.config to cause ASP.NET to run with the system account.
I prefer to tell people to create the event source themselves outside of a web application, but keep using the ASPNET user account for the application. This is a more secure solution.
The ideal solution for many of us is to change it to log errors to a file, since we can't use the EventLog on a hosted website. The VB
.NET code download explains this change.