Project 2007 Unable to Create New Calendar

Following a review of Project 2007 Survival Guide by Lisa Buoki, on page 43, where it instructs me to create a new calendar on step #2, I am unable to create it as the option is ‘ghosted’.

A solution to this is to go login to the /pwa website and go to the server settings, then select [Additional Server Settings] and then on the next page, select [Allow projects to use local base calendars]

When I run Project server 2007 again, the option to create a new calendar is not ghosted anymore.