The author of the game book actually wrote me back on this issue (Jonathan Harbour) and mentioned to me that the code actually works fine on the pocket pc 2002 OS? and it is a Casseopia pocket pc that he developed these things on.
I've noticed one thing on my project. If I load two separate bitmap images I get the memory alignment error and I'm out of luck. If I combine everything into 1 BIG bitmap image, then I have no problems.
In order to put ALL of the images onto 1 bitmap will increase the size of the game drastically and in a way I do not want because that is very inefficient.
I ran the programs on a Dell Axim X3 and had the same results. The Arm processors with pocket pc 2003 actually have problems with data misalignment and are not handled by the hardware. So, I'm still stuck where I need to fix the code, however, at least I think I have narrowed it down.