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**This problem is addressed in ArcGIS 8.1 Service Pack 1.**
This error may occur when attempting to create a very small buffer around a point feature in ArcSDE and use the buffer to perform a search:
"The number of points is less than required for feature", Error Number =
This is a known issue.
The way in which the buffer has been generated is causing the buffer feature to collapse once it is passed to ArcSDE.
When a circular arc is densified, a parameter called maxDeviation (max distance of any of the resulting line segments from the original circular arc) is specified. maxDeviation can have any value. If the value is large, as compared to the radius of the circular arc, there is only one resulting line segment connecting the two endpoints of the arc.
This sometimes results in degenerate geometries; for example, a polygon consisting of a full circle can collapse into a line or a point.
This problem is addressed in ArcGIS 8.1 Service Pack 1. See the Related Information section to download this pack.