Okay, the problem with your script had to do with using document.write (document.writeln is the exact same thing but it puts a "\n" at the end automatically). When you call document.write or document.writeln, it actually erases your entire document and starts to write a new one. You can see this by selecting View Source on the page after you've hit your "click" button. Since the entire old document had been overwritten, the function test() was no longer there to call, hence your "object expected" error. To fix this you have to include the test() function inside the part of generate() where you're writing the new document. I fixed the code for your table a little bit too... Here's how I did it:
<html>
<head>
<script language="javascript">
function generate(count) {
document.writeln("<html><head><script language='javascript'>");
document.writeln("function test() {");
document.writeln("alert('what'); }");
document.writeln("<\/script></head><body>");
document.writeln("<div style='position:absolute; left:0px; top:0px;'>");
document.writeln("<form name=dog><input type='button' value='New' onclick='test();'>");
document.writeln("</form><br><table border=1 width=630 cellspacing=0 cellpadding=0");
document.writeln(" style='position:absolute; top:150px; leftx;'><tr><th>heading</th></tr>");
var line=new Array();
for(i=0;i<count; i++) {
line[i]="<tr><td>text</td></tr>";
document.writeln(line[i]);
}
document.writeln("</table></body></html>");
}
</script>
</head>
<body>
<input type="button" value="click" onclick="generate(4);">
</body>
</html>