Do you still have get that error? What version of MATLAB are you using? And what version of ndSparse?
You seem to be the only one with this problem, I'm afraid. It doesn't readily reproduce on my machine and I haven't received similar complaints.
Not sure why my previous comment no longer appears, but I had mentioned that I get an error message when attempting to run ndstest -- the error message being something about the inputs to kron being of the wrong type, coming from line 882 of ndtest.
I realized that (for my comment below) the problem is that one of the inputs being sent to kron is ndSparse, which appears to not be ok. (The error comes up when checking convn in line 882 of ndstest).