Bug: Cannot buffer ArcMap Service event layer features using HTML client
** This issue has been resolved in ArcGIS 9.0. **
Event layers are based on tabular data. Events are plotted on a map using either x/y or route location field values stored in the event table. Route events can be either point events or line events. The process of displaying route events on a map is known as 'dynamic segmentation'.
Event layers, however, cannot be buffered when using an HTML client.
This is a known issue.
In order to buffer an event layer use an ArcIMS client other than HTML.