After creating a new boot environment (BE) named beastie, see below, to upgrade a system running Solaris 8 to Solaris 10 11/06 (as I do many times in the past without a hiccup), I encounter a problem when I tried to apply the appropriate Recommended cluster patch to the new BE with this message:

# luupgrade -t -n beastie -s /var/tmp/10_Recommended

Validating the contents of the media .
The media contains 76 software patches that can be added.
All 76 patches will be added because you did not specify any specific
patches to add.
Mounting the BE .
ERROR: The boot environment  supports non-global
zones.The current boot environment does not support non-global zones.
Releases prior to Solaris 10 cannot be used to maintain Solaris 10 and
later releases that include support for non-global zones. You may only
execute the specified operation on a system with Solaris 10 (or later)
installed.

I can't find any reference to a known bug or problem after looking for this against SunSolve, Sun Support, and Googling. Has anyone already seen this error, and solved it The Right Way? As for me, I needed to boot from the BE and apply the cluster patch: this was a pain since this bundle include the -36 kernel patch which is known to be relatively disruptive, since it need two reboot to apply the entire cluster patch (it contains a new version for the kernel).

Update #1 (2009-03-22): Seems to be explained in this excellent BigAdmin article.