Undergraduate doing a research term - supervisor has not assigned me any work to do other than reading, after one month. What can I do to fix this? I am an undergraduate student, and am using a term to study with a professor. We got along well in his class and I thought he had a keen interest in helping students.

From what I understand, initially I was supposed to work on a project that some other group would deliver to us. We waited until a week and a half ago, and abandoned that. In the meanwhile, I have basically been reading full-time. Unfortunately I find it very difficult to read for 8 hours a day, 5 days a week and so have been losing a lot of motivation at work. Typically when reading technical stuff, there is something I can apply it to which makes it easier to remember and motivate for. Instead, I am reading through entire textbooks, cover to cover.

I have asked my supervisor what sort of project I can start working on, but he has instead told me to continue reading and that I need to be "more proactive". Is it normal for me to have to propose my own projects when I have no idea what the state of the art really is? I feel as though he is blowing me off. I have proposed projects before but he has said that they aren't relevant enough to the field.

The last working month has been one of the most miserable experiences of my life and it's been negatively effecting my professionalism, work ethic and personal relationships. What can I do to rectify this, given that I've already spoken with him? Do I need to resign?
As an undergraduate, it is not normal for you to be expected to come up with the research project on your own (that is what getting a PhD teaches you!). When I started out I was typically assigned a graduate student advisor who would let me work on their project or would work directly with me to propose another. 

There is typically a lot of reading that you will do when first starting out, but not applying it directly to a project or research proposal after a month indicates that something needs to change.

I would first talk about these matters with someone who understands your supervisor (graduate student, postdocs etc.) to understand more about your supervisor's expectations. Then have a talk with your supervisor with your concerns (they are valid!). If your supervisor continues to not be helpful I would consider finding another. It's tough to start over, but it would be better in the long run if you can find a better lab that is more nurturing to your growth as a researcher.