>Thanks for the UPDATE(column) function which I didn't know. But the question still remains - is it OK or not to UPDATE another column in the UPDATE trigger.
>
>May be there is a way to find out current RECURSIVE_TRIGGERS option status and adjust it inside the trigger's code and restore back?

ALTER DATABASE ... before and after trigger? Grrr, I don't think so.
Also I am not sure that ALTER DATABASE will works if you have connection to that Database, I am pretty sure that this command requires exclusive use of the database (you should check this, I am not sure about it).
It is OK (for me) to change the same table with the trigger. Just use that check. Remember TRIGGER fires once after the job is done not after each record you changed.
If the RECURIVE_TRIGGERS is ON first time the trigger is fired you will have Status field updated so you do UPDATE of the second field, the second time trigger is fired that field would be not updated and the trigger stop fired itself.
AGAIN NOT TESTED :-)