I forgot to mention that the documentation (even in 7) states that the error handler will fire:

If lForce is false (.F.), Visual FoxPro commits changes to the table or cursor, starting with the first record and continuing towards the end of the table or cursor. If a record modified by another user on the network is encountered, Visual FoxPro generates an error.

When Visual FoxPro generates the error, you can handle the error through an ON ERROR routine, and the ON ERROR routine can issue TABLEUPDATE( ) with lForce set to true (.T.) to commit changes to the record. Alternately, if a transaction is in progress, the ON ERROR routine can handle the error and then issue ROLLBACK to revert the table or cursor to its original state.