Insert Update trigger how to determine if insert or update

Triggers have special INSERTED and DELETED tables to track "before" and "after" data. So you can use something like IF EXISTS (SELECT * FROM DELETED) to detect an update. You only have rows in DELETED on update, but there are always rows in INSERTED.

Look for "inserted" in CREATE TRIGGER.

Edit, 23 Nov 2011

After comment, this answer is only for INSERTED and UPDATED triggers.
Obviously, DELETE triggers can not have "always rows in INSERTED" as I said above

CREATE TRIGGER dbo.TableName_IUD
ON dbo.TableName
AFTER INSERT, UPDATE, DELETE
AS 
BEGIN
    SET NOCOUNT ON;

    --
    -- Check if this is an INSERT, UPDATE or DELETE Action.
    -- 
    DECLARE @action as char(1);

    SET @action = 'I'; -- Set Action to Insert by default.
    IF EXISTS(SELECT * FROM DELETED)
    BEGIN
        SET @action = 
            CASE
                WHEN EXISTS(SELECT * FROM INSERTED) THEN 'U' -- Set Action to Updated.
                ELSE 'D' -- Set Action to Deleted.       
            END
    END
    ELSE 
        IF NOT EXISTS(SELECT * FROM INSERTED) RETURN; -- Nothing updated or inserted.

    ...

    END