I am simply trying to make point shapefiles from x,y data. It doesn't seem to work, perhaps I am doing it incorrectly. Please check the image below it fully illustrates the issue I am having.
By chance are your longitudes missing a negative sign?
The problem is that you selected Projected Coordinate System as a 'Coordinate System of Input Coordinates' and it should be Geographic Coordinate System (GCS).
Google uses WGS 1984 as a GCS so to use this GCS for your data you have to:
- in Spatial Reference Properties dialog box click Select
- then Geographic Coordinate System -> World -> WGS 1984.prj
BTW: coordinates assignment standard is:
X Field - Longitude: -97.105016
Y Field - Latitude: 33.159106