I have tried to use the UpdateCursor method in ArcGIS Desktop 10 SP1 (standalone python and the python window in arcCatalog) and 9.3.1 (standalone python) on an SDE table.  I get errors with any method.  
Suggestions?  Workarounds?  Is this a bug?
EDIT:  The Insert Cursor and Search Cursor functions do not cause errors.  This is not versioned.
EDIT2:  Turns out the SDE table I was prototyping on did not have OIDs.  Problem solved 🙂