Hi Dan,
The reason is listed under cause in the MS KB link provided by Paul, basically
A format in this case means each combination of font characteristics.
ie. Font type, font size, font color, interior color, bold, underline, pattern,
number format, height, width, etc. Reduce as much as you can.
Eliminating unused custom cell formats might also help.
The practical limit may be about 3K rather than 4K mentioned in the MS KB article..
Leo Heuser has a macro that you can find described in the 7th issue (eee007)
of the Excel Experts E-letter to remove unused custom number formats.
The EEE newsletter is maintained by David Hager (MVP-Excel). (link to revised code below)
http://www.j-walk.com/ss/excel/eee/eee007.txt
Leo posted a macro 2001-05-06 in programming as a very major revision
of the macro in the eee007 article.
http://google.com/groups?threadm=OxP9cgi1AHA.1572@tkmsftngp02
There is some rather obvious line wrapping occuring but they should show
up in RED as syntax errors in the Visual Basic Editor.
If not familiar with macros see Getting started with macros
http://www.mvps.org/dmcritchie/excel/getstarted.htm
It is more efficient and less likely to cause a much of a problem if you
format all the cells at the same time that you want a font etc.
i.e. Format the entire column 1 and row 1 as bold, not one cell at a time.
same for borders etc, .