SQL Transaction Error: The current transaction cannot be committed and cannot support operations that write to the log file

You always need to check for XACT_STATE(), irrelevant of the XACT_ABORT setting. I have an example of a template for stored procedures that need to handle transactions in the TRY/CATCH context at Exception handling and nested transactions:

create procedure [usp_my_procedure_name]
as
begin
    set nocount on;
    declare @trancount int;
    set @trancount = @@trancount;
    begin try
        if @trancount = 0
            begin transaction
        else
            save transaction usp_my_procedure_name;

        -- Do the actual work here

lbexit:
        if @trancount = 0   
            commit;
    end try
    begin catch
        declare @error int, @message varchar(4000), @xstate int;
        select @error = ERROR_NUMBER(),
               @message = ERROR_MESSAGE(), 
               @xstate = XACT_STATE();
        if @xstate = -1
            rollback;
        if @xstate = 1 and @trancount = 0
            rollback
        if @xstate = 1 and @trancount > 0
            rollback transaction usp_my_procedure_name;

        raiserror ('usp_my_procedure_name: %d: %s', 16, 1, @error, @message) ;
    end catch   
end

There are a few misunderstandings in the discussion above.

First, you can always ROLLBACK a transaction... no matter what the state of the transaction. So you only have to check the XACT_STATE before a COMMIT, not before a rollback.

As far as the error in the code, you will want to put the transaction inside the TRY. Then in your CATCH, the first thing you should do is the following:

 IF @@TRANCOUNT > 0
      ROLLBACK TRANSACTION @transaction

Then, after the statement above, then you can send an email or whatever is needed. (FYI: If you send the email BEFORE the rollback, then you will definitely get the "cannot... write to log file" error.)

This issue was from last year, so I hope you have resolved this by now :-) Remus pointed you in the right direction.

As a rule of thumb... the TRY will immediately jump to the CATCH when there is an error. Then, when you're in the CATCH, you can use the XACT_STATE to decide whether you can commit. But if you always want to ROLLBACK in the catch, then you don't need to check the state at all.