you have to divide this into different sections in order to identify the problem.
Basically, it can be split into
1. Hardware
2. Software
and further H/W can be split into
1. LM35
2. ADC
3. Microcontroller
As a first step, take the Hardware section.
1. LM35
Observe the output pin of LM35 with a voltmeter or oscilloscope.
you have to verify that, whether the output changes with respect to the temperature.This can be done by placing the soldering iron tip near the sensor, to vary the temperature. For LM35, i think for every 1degree rise, the out put voltage should be increased with 10mV. If you can observe this, this part is fine and proceed to the next.
2. ADC0808
Observe the digital outputs with and vary the temperature as done in the previous step.If the digital output varies accordingly, you have no problem here.
3. Microcontroller.
Verify the wiring and circuit set up whether you have done it correctly.
Software
If you couldnt find any problem with the hardware, then obviously the problem lies in the software.Though the codes are taken from the book, there can be something which you have to set/reset yourself, which may not be mentioned in the book.For that you need to get the program here, so that someone can have a look at it.