right-click on the layer, select Data | Export Data, towards the bottom right, where it says Format, did you select Grid? Then don't give it an extension but ensure that the Name is less than 13 characters, doesn't contain spaces and doesn't begin with a number...also navigate to a folder that doesn't contain spaces either, so it you "stuff" is going to C:documents and settings...that is a big no no. See if the divide by 1000.0 works on a grid, which I assumed you had been working with.