This is a known issue with SQL Server 2008, that certain DDL operations like ALTERing a column datatype using Management Studio GUI fails.
For example, in Object Explorer, navigate to a table column > right-click on column > Modify. Change column datatype or length, then save and this error message displays:
To workaround this problem, go to Query Editor and issue the following DDL statement instead:
ALTER TABLE dbo.FTPFile ALTER COLUMN CmdLine VARCHAR (100) ;
The column change is successfuly applied now.