Ok - So the out.el not defined was simply an error when attempting to write out to the status window before it was actually rendered. So now when you load the demo page, you will see the status window (some might not have even noticed that it was there), and then it will collapse. You can expand it at any time. I have dumped this demo in my 3.1 install and everything is work fine.
I did make a few small changes, see the first post in this thread.
Yes, for just a simple session start, that is where I would put it.
The sessions are so application specific that I never added anything for session support. But I guess I should put some info/documentation in there so that others can find what you have already discovered.