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Why aren't NULL values in a shapefile converted to NULL Oracle values in ArcSDE?
The attributes in a shapefile are maintained in a dBase file. Until dBase 7, the dBase format did not support the concept of a NULL value. In ArcView 3.x and in ArcMap 8.x, NULL integers in a shapefile are stored as 0, and NULL text strings are stored as a space.
When converting this data to ArcSDE, these are the values that are stored in the underlying database.
It is important to make this distinction. If the value needs to be NULL, make the change at the database level using SQL, prior to registering the data as versioned or select an underlying format that supports the NULL value.