sewetee, I can confirm that this works (at least, it did for me with my WP 3.0 running multisite). Was having problems creating categories on a child site, with the same error: "Could not insert term into the database." Using the SQL command line client--you could do the same with the phpMyadmin GUI if your database isn't too large, btw--I used the following commands to add/delete a record from the wp_xx_terms table:
To insert the record:
insert into wp_[**blog id here**]_terms (term_id, name, slug) values ('[new term id value]', '[new name value]', '[new slug value]');
... and then to delete the record:
delete from wp_[**blog id here**]_terms where term_id=[new term id value];
For the record, I only provided values for term_id, name, and slug per instructions I found on another thread (there is one more field in that table; I forget what it is at the moment). Also, as a disclaimer, the queries were run in a WAMP environment, so your syntax could very well vary--but this is at least ballpark.
It's also worth mentioning that I did the standard stuff when I first noticed the error: changed the theme, tried to deactivate plugins, etc. Anybody know if Andrea_R has any thoughts on this? I'm not seeing any confirmation of a bugfix anywhere, but plenty of posts reporting the same error--some old, some newer.
I have no idea technically speaking why this fix works. If anyone can enlighten us, that would be fantastic!!!