The list cannot be displayed in Datasheet view for one or more of the following reasons
- A datasheet component compatible with Microsoft SharePoint Foundation is not installed.
- Your Web browser does not support ActiveX controls.
- A component is not properly configured for 32-bit or 64-bit support.
And if you've setup environment like me which has
SharePoint 2010 , Office 2010 x64, SharePoint designer x64 then you are bound to get this error!
The resolution
In order to use the datasheet view, download this 2007 Office System Driver: Data Connectivity Component
Once you set it up, reopen the internet explorer and edit in datasheet view!
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