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When displaying an annotation layer, for the first time, that was converted from coverage annotation into SDE, some features may not fit the original placement. This affects annotation that was placed along curved lines (splined).
This is a known issue.
This problem is addressed in ArcGIS 8.1 Service Pack 1. See Related Information section to download this pack.
If Service Pack 1 is not installed, save and re-open the map document.