That's a similar architecture to what we did at eCircles. We decided to create logical database "requests" that mapped to one or more stored procedure calls with explicit input and output variables.
This means that the application code doesn't know anything about the database - it only knows about these database requests, which allowed us to decouple the applications from the database somewhat.
As for transactions, with Sybase at least we managed to never have a transaction that spanned multiple database requests. I realize that this may not always be possible, but keeping transactions short helps tremendously on general throughput for the database.
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