Hi I have also faced the same problem with Enterprise Library for .net 1.1.
It is also giving the SecurityException when I deployed my application in the hosting environment.
I have written mails to some great guys around Microsoft but they have given some answer that hardly solve the problem.
It's about CAS (Code Access Security). Enterprise library app. blocks are given the SecurityPermission and EnvironmentPermission attributes. But in the hosting environment they are not given the required permissions.
That's the problem.
So either you can remove those attributes from the assemblyinfo.cs files of individual app. blocks or ask your hosting partner to grant those permissions to the required assemblies.
Both the solutions are not logical so I have already written a wrapper assembly which implements the classes of enterprise library in simple ado.net.
If you have any other work-around let me know.