Hmmm.
I just tried it on SQL 2012 and your query copy'n'pasted ran fine: "Windows and SQL Server Authentication" was returned.
And the documentation
SERVERPROPERTY (Transact-SQL)[
^] says it appies to SQL 2008, so it should work for you.
Check your query - make sure that it isn't some other part of a bigger query that is throwing the error and making you think it's the SERVERPROPERTY call that causes the problem.
Failing that, how exactly are you executing the query?