Thanks for your posting. My scenario was slightly different and your solution didn't work for me as-is. My particular environment is with running SSMS 2008 and pointing to a SQL 2000 DB, so your examples didn't work due to the target DB being SQL Server 2000. Instead, I had to use the following:

if exists (select * from dbo.sysobjects where id = object_id(N'[dbo].[<insert_tablename>]')

and OBJECTPROPERTY(id, N'IsUserTable') = 1)

drop table [dbo].[<insert_tablename>]

GO

Which is the SQL 2000 syntax as created by Enterprise Manager script generation.

Maybe someone else will find this helpful too.