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This problem is addressed in ArcGIS 8.1 Service Pack 1. See Related Information section to download this pack.
When using the Modify Feature task to modify a polyline or polygon feature, it is possible to delete the shape.
If you delete all vertices but one, you are unable to perform a 'Finish Sketch' because the feature's shape would be invalid. However, if you simply left click anywhere except the last remaining vertex, the sketch is finished and you create a null shape.
You can undo the edit transaction that created the null shape.
Alternatively, you can delete the feature with a null shape using the Attribute Table. A null shape feature has either a length of 0 if it is a polyline, or an area of 0 if it is a polygon.
This has been resolved in Service Pack 1.