Gerard O Carroll (8/30/2011)
Now when my business rules kick in I cannot save because it says Row 3 (Now has an A) causes a duplicate (Because Row 1 even though it has been removed from the BO. is still in the Database
This could be tricky, but that is not the case. The deleted record is still in the BO.DataTable and when saved, it will send the instructions to the database to physically delete it. Check the "Saving Data" topic of the SF help file to see the saving sequence done by SF.
On the other hand, you could try setting the bo.ErrorSavingMode = ContinueOnError to avoid the error message, and continue with the Save process, but I am not sure if that will give you the effect you want nor if that would cause invalid records to be saved at some point.
I learned by experience that users don't know the difference between soft delete (as in VFP) and hard delete, so in some bulk cases I soft delete the rows and then save them in a single call, but when need to interact like in your case I will simply hard delete the record.