I can modify the content type in datasheet view if I make the content type the first column in the view.
However I note that if the original content type is "folder" then you are not allowed to change the content type to a content type that inherits from folder.
I can change the content type via "edit properties" from "folder" to "custom folder"
Then in datasheet view I can change "custom folder" back to "folder"
However I cannot change "folder" back to "custom folder" through datasheet view.
SharePoint Farmer in training