Periodically, I will get a sudden loss of power to my desk area only (not the whole house) and my UPS doesn't switch to battery. The log just says: Are some the receptacles unswitchable, or could my settings be causing this?

2/4/10 22:44:41 Communication Established
2/4/10 22:44:30 Monitoring Started
2/1/10 16:19:10 Communication Established
2/1/10 16:18:48 Monitoring Started
1/31/10 22:24:37 Communication Established
1/31/10 22:24:22 Monitoring Started
1/31/10 06:23:48 Communication Established
1/31/10 06:23:41 Monitoring Started
1/31/10 06:21:12 Monitoring Stopped
1/28/10 22:24:40 Communication Established
1/28/10 22:24:33 Monitoring Started
1/26/10 03:19:06 Communication Established
1/26/10 03:18:59 Monitoring Started
1/26/10 03:16:38 Monitoring Stopped
1/18/10 18:39:22 Communication Established
1/18/10 18:39:15 Monitoring Started
1/13/10 22:59:12 Battery Needs Replacing

I don't know why it said bettery needs replacing that one time, becasue all is well now:

2/5/10 20:44:58 118.3 119.6 118.9 118.9 60.00 27.87 27.0 35.1
2/5/10 20:24:59 118.3 119.6 118.9 119.6 60.00 27.87 27.0 35.1
2/5/10 20:04:59 117.0 118.3 117.6 117.6 60.00 27.87 28.0 35.1
2/5/10 19:44:59 118.3 119.6 118.9 118.9 60.00 27.87 27.0 35.5
2/5/10 19:24:59 118.9 120.2 119.6 119.6 60.00 27.87 27.0 35.5
2/5/10 19:04:59 118.9 120.2 119.6 119.6 60.00 27.87 22.3 35.5
2/5/10 18:44:59 119.6 120.2 120.2 120.2 60.00 27.87 27.0 35.5
2/5/10 18:24:59 120.2 121.5 120.9 120.9 60.00 27.87 28.6 35.5
2/5/10 18:04:59 119.6 120.2 120.2 120.2 60.00 27.87 28.0 35.5
2/5/10 17:44:59 118.9 120.2 119.6 119.6 60.00 27.87 27.0 35.5
2/5/10 17:24:59 118.3 120.2 118.9 118.9 60.00 27.87 27.0 35.5
2/5/10 17:04:59 118.9 120.2 120.2 120.2 60.00 27.87 26.5 35.5
2/5/10 16:44:59 119.6 120.2 120.2 120.2 60.00 27.87 26.5 35.1
2/5/10 16:24:59 120.2 120.9 120.9 120.9 60.00 27.87 27.0 35.1
2/5/10 16:04:59 118.9 120.2 119.6 119.6 60.00 27.87 27.0 35.1
2/5/10 15:44:59 119.6 120.2 120.2 120.2 60.00 27.87 28.0 35.1
2/5/10 15:25:00 119.6 120.2 120.2 120.2 60.00 27.87 21.8 35.1
2/5/10 15:05:00 120.2 120.9 120.2 120.9 60.00 27.87 27.0 35.1
2/5/10 14:45:00 120.9 122.2 122.2 122.2 60.00 27.87 27.0 35.1
2/5/10 14:25:00 120.2 121.5 120.9 120.9 60.00 27.87 21.8 35.1
2/5/10 14:05:00 121.5 122.2 122.2 122.2 60.00 27.87 21.8 35.1
2/5/10 13:45:00 120.9 122.2 121.5 121.5 60.00 27.87 21.8 35.1
2/5/10 13:25:00 120.2 121.5 121.5 121.5 60.00 27.87 21.8 35.1
2/5/10 13:05:00 120.2 121.5 120.9 120.9 60.00 27.87 21.8 35.1
2/5/10 12:45:00 120.2 120.9 120.2 120.2 60.00 27.87 22.3 35.1
2/5/10 12:25:00 120.2 121.5 120.9 120.9 60.00 27.87 22.3 35.1
2/5/10 12:05:00 120.2 121.5 120.9 120.9 60.00 27.87 21.8 35.1
2/5/10 11:45:00 120.2 121.5 120.9 120.9 60.00 27.87 21.8 34.6
2/5/10 11:25:00 120.2 121.5 121.5 121.5 60.00 27.87 22.3 35.1

The "change battery" detection is highly unreliable at best and usually fails to identify battery in need of replacing. It could also give a false positive if the UPS is overloaded.

First try a self-test with no load. If it passes, the inverter should be fine.
Then,
Run a UPS on 300 or 500W halogen light and try to make it go on battery and initiate a self-test by holding the button on the front for 3 seconds or so. If it responds by "replace battery" or 'overload' light or it shuts off, your batteries need replacing. You'll need two 12v 12Ah or 12120 batteries and save the fuse from the original battery. Batteries should cost $50-60 online.