Mancavano due parentesi graffe dell'else :

codice:
function onsubmitform()
{
  if(document.pressed == 'Insert')
  {
   document.myform.action ="insert.html";
  }
  else
 {
    if(document.pressed == 'Update')
    {
      document.myform.action ="update.html";
    }
 }
  return true;
}
</script>

<form name="myform" onsubmit="return onsubmitform();">
<input type="submit" name="operation" onclick="document.pressed=this.value" value="insert" />
<input type="submit" name="operation" onclick="document.pressed=this.value" value="update" />
</form>