Hi Michelle,
Sorry that you are having trouble generating a Spatial Weights Matrix!! I have a couple of suggestions that may help. One suggestion is to try creating a new field of type Long, and calculate the field using the FID/OID. Then, and this is important, shut down ArcMap, then reopen it and try to use that new field you created. You may be having trouble with a bug that was fixed at 10.0 SP1 that involves empty selections after new fields are calculated. Closing down ArcMap seems to do the trick. And if you haven't installed 10.0 SP1 yet, I strongly encourage you to do that as well.
Another possibility is that the field that you are trying to use does not contain unique values? The Unique ID has to have a different value for each feature, which is why we suggest using either the FID or the OID for calculating your new UniqID field...just in case.
Sorry for the inconvenience!
Lauren Rosenshein
Geoprocessing Product Engineer