This is a serious bug. Even a simple example fails with the same error.
\starttext \framed{ \startformula x^2 = x\cdot x \stopformula} \stoptext
A quick workaround is to use frametext instead of framed, but I am pretty sure that the above example used to work at some stage.
hmm, I can test with two older release. Same error. %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% This is pdfeTeXk, Version 3.141592-1.11a-2.1 (Web2C 7.5.2) (format=cont-en 2005.8.26) 11 APR 2007 12:12 entering extended mode %&-line parsing enabled. **&cont-en t.tex (./t.tex{/usr/share/texmf/pdftex/config/pdftex.cfg} ConTeXt ver: 2002.6.25 fmt: 2005.8.26 int: english mes: english ! Missing $ inserted. <inserted text> $ <to be read again> ^ l.4 x^ 2 = x\cdot x %%%%%%%%%%%%%%%%%%%%%%%%%%%% %%%%%%%%%%%%%%%%%%%%%%%%%%%% This is pdfeTeX, Version 3.141592-1.21a-2.2 (Web2C 7.5.4) (format=cont-en 2006.3.2) 11 APR 2007 12:05 entering extended mode (/usr/share/texmf/web2c/natural.tcx) **&cont-en t.tex (./t.tex ConTeXt ver: 2005.01.31 fmt: 2006.3.2 int: english mes: english ! Missing $ inserted. <inserted text> $ <to be read again> ^ l.4 x^ 2 = x\cdot x %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% luigi