OK. I ran your script and created the database, tables and triggers. I then ran the following queries:

insert into table1 values ('a', 'b')

select * from table1
select * from table2

and got the results that I would expect to get. table1 has a row {1,a,b} and table2 has a row {1, a, null}. The trigger is working as you would expect, although I still think that you should write it in a set-oriented fashion.

Can you provide a script that duplicates what you're seeing?

-Mike