I couldn't get it to work in 8.1.6 but a quick search on Google clued me in to why that might be true:
"CASE was introdiced in Oracle 8i, but only in SQL, not in PL/SQL.
It is available both in SQL and PL/SQL in Oracle 9i."
I was probably trying it in a PL/SQL statement ...
I have 8.1.6 here I'll try to remember to test it in SQL, would be nice to get rid of some of the Oracle-specific queries in the toolket!