You don't need to edit anything - you need to load the file romconfig.dat as the configuration file for ROM under (Area Editor) menu: File -> Preferences -> General -> Configuration. That file comes with the Area Editor download.
After doing that, it opens midgaard.are without any problems except a couple of warnings.
I get those errors in area files. For some reason sometimes the editor will try to read the spell list in objects that cast spells as the beginning of a new object.
For example:
When I load up Olympus I get; Object details must start with a "#"
I click ok and it says; Error occured at (line 508) "trident poseidon~"
Then it says; Unexpected file format and closes.
I can usually move the spell list into the description until im done editing the file then put them back.
I got that error because I forgot to put 'sanctuary' back in the ivory staff just above it and was fine after I did.
I edit files using the Area Editor and Notepad.
I don't know if this helps anyone or not, but I thought I would post this.