>>>This works
>>>

>>>SELECT * FROM mytable where;
>>> f1 in (SELECT f1 from look_up group by f1 having count(*) = 1) AND ;
>>> f2 in (select f2 from look_up group by f2 having count(*) = 1)
>>>

>>>
>>>and this fails
>>>

>>>update mytable set flag = "1" where;
>>> f1 in (SELECT f1 from look_up group by f1 having count(*) = 1) AND ;
>>> f2 in (select f2 from look_up group by f2 having count(*) = 1)
>>>

>>
>>And you are very sure that the SELECT returns correct record but UPDATE didn't update all of them?
>>What happens with this:
>>

>>update mytable set flag = "1";
>>FROM mytable;
>> where f1 in (SELECT f1 from look_up group by f1 having count(*) = 1) AND ;
>>       f2 in (select f2 from look_up group by f2 having count(*) = 1)
>>

>
>the select works fine, the update give the error "sql statement too complex"

What version of VFP?
How about (Just in case you use VFP9):

update mytable set flag = "1";
       FROM mytable;
INNER JOIN (SELECT f1 from look_up group by f1 having count(*) = 1) Tbl1 ON MyTable.F1 = Tbl1.F1
INNER JOIN (SELECT f2 from look_up group by f2 having count(*) = 1) Tbl2 ON MyTable.F2 = Tbl1.F2