Question

Does sql server allow nested transactions?
If so then whats the priority of transactions?

Answer 1

From the MSDN documentation on SQL Server. Nesting Transactions:

Committing inner transactions is
ignored by the SQL Server Database
Engine. The transaction is either
committed or rolled back based on the
action taken at the end of the
outermost transaction. If the outer
transaction is committed, the inner
nested transactions are also
committed. If the outer transaction is
rolled back, then all inner
transactions are also rolled back,
regardless of whether or not the inner
transactions were individually
committed.