Problems creating new Web Dynpro ABAP application

All,

I am following this tutorial to create my first Web Dynpro ABAP application

http://help.sap.com/saphelp_nw70ehp1/helpdata/en/fc/501b42b5815133e10000000a155106/frameset.htm

In this tutorial I was asked to create a component as Local object.

But after giving the name of the component, I get an alert saying

"Object can only be created in SAP Package"

When I confirm this, I was shown a "Create Object Directory entry" dialog box which asks for attributes like Package.

And this box has Local Object button, when clicked I get the message "Test Objects cannot be created in foreign namespaces".

I found some other article through Google

http://www.octavia.de/fileadmin/octavia_files/content_bilder/Hauptnavigation/SAP_NetWeaver/WebDynpro/Web_Dynpro_Part_I.pdf

According to this, I tried to give $TMP as Package. But still have the same error

"Test Objects cannot be created in foreign namespaces"

Where am I and what should I do to create a new project?

Thanks.