what a coincidence , i was just doing the same script for the first time 

what i 
think is that you cant use a Area, because a Area doesn't have a Callback.
they LookAt script doesnt work either for me ; SetEntityPlayerLookAtCallback(string& asName, string& asCallback, bool abRemoveWhenLookedAt);
what i did was putting the LookAt at a object and made a Callback 
void Scare_GruntFood(string &in entity, int alState)
{
    AddDebugMessage("LookAt" + "'s current state: " + alState, false);
    if (alState == 1)
    {
        SetEntityPlayerLookAtCallback("", "", true);
        GiveSanityDamage(50, true);
        PlaySoundAtEntity("Breath", "react_pant.snt", "Player", 0, false);
    }
}
the only thing you have to do is putting your callback in the level editor, in the PlayerLookAtCallback ofcourse 

. and be sure to click the PlayerLookAtCallBackAutoRemo option in the level editor Entity 
 
if anybody know how the LookAtCallBack script works and if it is possible at a Area, please reply. You'll help us both, hehe 
