Using Christof's and Ed's solutions are the best methods. However, if you absolutely need a temporary table in the D.E. there is a work around by putting a local view in the data environment based on your temporary cursor.

Go to the command window and create your cursor.

Then after the cursor is created create an SQL view from the command window.

Create SQL view as select * from 'tempcursor'

This will add the local view based on your cursor to the .dbc thus you will now be able to add to the DE

In the init event of the form you need to re-create the cursor with the same code used above so the view can be based on the cursor. Of course this can only be used for viewing data, and perhaps not the best solution but it is possible. It might work well for generating a quick report by dragging and dropping the fields from the view into the report designer. If you were to use it for this you wouldn't need to create the temp cursor until you are ready to run the report.

If anyone see's any inherit problems with doing this I would appreciate further insight.