Problem: Creating TIN from dataset added from TIN dialog can crash application
This problem is addressed in ArcGIS 8.1 Service Pack 1. See the Related Information section to download this pack.
Building a TIN from a dataset browsed for from the TIN dialog can crash the application if the application's spatial reference is undefined.
The TIN builder is trying to get the spatial reference from the document, but since it's empty it doesn't have one.
Solution or Workaround
Add the dataset to the document as a layer and use it as input to build the TIN.