The error is coming from this portion of the SQL statement
:Old_Description IS NULL
Basically the parameter is on the left hand side and ADS doesn't know what type it is so it can check for nulls (i.e. a character, etc) during the parsing phase. If I remember correctly, the parsing phase is done before the parameters are even actually sent so the type setting isn't used.
To work around this you can do the following
CAST(:Old_Description AS SQL_CHAR) IS NULL
Unfortunately I'm not sure how you will tell "Alpha Anywhere" to modify the statement as I've never used the product.
(Also, just an FYI ADS 10.x is unsupported