The message you are getting means that Universe Sandbox is “setting the radius so the escape velocity equals the speed of light." Which is a simplistic definition of what defines a black hole. A blackhole in Universe Sandbox is a body who’s radius is such that its escape velocity is equal to the speed of light. (the escape velocity is how fast something needs to travel to escape the gravitational tug of the body)
The radius a body needs to be so the escape velocity equals the speed of light is called the Schwarzschild radius:
http://en.wikipedia.org/wiki/Schwarzschild_radiusThe “black hole” button that you’re hitting only changes the body’s size. If you do it on the Earth it makes it about 3 cm across. In reality if you made the Earth this size it would be considered a black hole, but there’s so little mass it would explode apart from the pressure.
You probably will have better success making the body’s mass much greater (and turn down the time step). This will cause it to suck in everything around it.
I’m sorry this isn’t more clear. I expect this to be much more clear in the next release.