How to rollback a transaction in TSQL when string data is truncated?

If your on SQL 2005 you can try:

BEGIN TRANSACTION
BEGIN TRY
    --Run your Statements
    COMMIT TRANSACTION
END TRY
BEGIN CATCH
        ROLLBACK TRANSACTION
        DECLARE @Msg NVARCHAR(MAX)  
        SELECT @Msg=ERROR_MESSAGE() 
        RAISERROR('Error Occured: %s', 20, 101,@msg) WITH LOG
END CATCH