From my friend Tom Karpowich:
There is a bug in GP 10 when using SQL 2005 & Intercompany. Basically, Intercompany does not work in the calendar year 2008 without the fix. The Dynamics support team has suggested that a hot fix will be released in the near future.
The error is: DB error 8114 when posting intercompany trx
Tom and the MS team spent a leisurely (not) 5 hours working their way through this so you don't have to. If this helps you, you owe Tom a drink at Convergence. I'm sorry, that's just the way the world works.
The SQL Fix is a bit big to post here so I'll add it as a link and put a link in the downloads on the right.
As always, apply any code you find here at your own risk. This is not an official MS fix, you'll have to wait for a hot fix for that.