If the database is non-essential - set the database to truncate the log on checkpoint. This will keep the log very small if your transactions are small.
By default, SQL Server will insert all records or nothing. SQL Server will create an implicit transaction for the procedure and if there is an error on the second to last record - the entire transaction will be rolled back (which can be problematic).
If you want those records that can be...
Using DTS's Data Driven Query Task, the logic of UPDATE or INSERT could be contained (if you are more familiar with DTS). Otherwise a custom solution could be made with a stored procedure that does the UPDATE or INSERT depending on presense of a key value.
The DTS Wizard does not have this...
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