Think I found the issue. This occured in our test database server. It seems that one of our developers was messing around with Replication and tried to replicate a dbase from our development to test and didn't change the dbase name and replicated to the existing dbase. Well, that dbase isnt' meant for transactions. So, when we were testing our application - we were getting PK constraint errors because we were inserting records from the replicated dbase.