The problem lies in the fact that you have applied a Property Data Format [PDF] to your area value that appends " SF" to the numeric value. When that value is brought into your formula, it is interpreted as a string, and the formula fails since multiplication requires a numeric value.
In ancient times (2006 and earlier), you would have had to set up a separate automatic property referencing the same automatic property source to serve as a source of the "unformatted" numeric value for use in formula properties. In 2007 and 2008, you can override the PDF assigned to the property and choose another, in the Enter Sample Values area. If you assign a PDF that does neither uses imperial architectural units nor adds a non-numeric prefix or suffix, you can get your formula column to work without creating an unformatted property.
The attached file has a quick sample showing how this works. If you want to read more about overriding PDFs in formulas (written around their use in a formula property rather than a formula column, but the same principle applies to formula columns and the dialogs are very similar), you might want to take a look at this blog article:
http://architects-desktop.blogspot.com/2007/04/aca-2008adt-2007-setting-different.html
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David Koch
Autodesk Discussion Group Facilitator
Using ADT 2004 at work; access to 2005, 2006, 2007 & 2008 at home
