Is there a fix for this??? The same thing happens with updates as well as
inserts.
I found that empty strings are incorrectly replaced with null. For example:

use tempdb
go

create table [dbo].[Test_Source]
(
[Id] int not NULL,
[Field] varchar(255) NULL
)
go

insert into [dbo].[Test_Source] select 1, ''
insert into [dbo].[Test_Source] select 2, NULL
go


create table [dbo].[Test_Destination]
(
[Id] int not NULL,
[Field] varchar(255) NULL
)
go


create procedure [dbo].[Test_Destination_Insert]
@_Id int,
@_Field varchar(255) = NULL
as
insert into [dbo].[Test_Destination]([Id], [Field]) select @_Id, @_Field
go


-- Invoke a DTS package using DDQ Task.


select * from [dbo].[Test_Source]
select * from [dbo].[Test_Destination]
go


And I show Source as having 1/empty string and 2/NULL. My Destination table
has 1/NULL
and 2/NULL.