Just out of curiosity I tested your example file, but mkiv stops upon ! Undefined control sequence. l.16 \defineannotation The version I have is ConTeXt ver: 2011.02.05 11:37 MKIV.
Please update your installation, the annotation module was
added on Sunday to the minimals. I’ll add documentation later
but you can take a look at the examples at my bitbucket site [1].