Inline...

>I have SQL 6.5 database.
>
>So I DUMP TRANSACTION dbName WITH NO_LOG, and extended the size of the device and the database by 300 MB. When I look at the database in SQL Enterprise manager, it gives the correct new DB Size as 1600MB, but still shows 0 bytes available for data. Also I cannot add any more records to my very large table as I get more out of space errors.
>

The Enterprise Manager is notorious for not reporting accurate space usage. Try sp_spaceused and DBCC SQLPERF(LOGSPACE). These should give you better numbers.

>It has been suggested that I backup the database (2 hours), delete and recreate the database, then restore the data (2 hours again). Does anyone have any quicker suggestions?

Are you trying to free up space or restructure you database to seperate the data and log segments?

-Mike