I had this same problem, if you turn off the traction control/stabilty system it will stop enabling the traction control and you will retain the ABS. You have to do this each time you start the truck, but at least no more dangerous engaging of the traction control.
I have an extended warranty and GM said it wouldn't cover the cost of only cleaning the sensor, b/c it wasnt damaged. I argued with GM, but it refused to cover the cleaning. Fortunately, the entire hub needed to be changed b/c it was damaged and that was covered.
This is becoming a more common problem as our trucks age, and as mentioned below, only trucks 02 and older are covered under the recall. I pointed out the similarity between the 02 and newer sensor issues, but GM refused to hear it.
For others who may have this issue that the dealer must recreate in order to diagnose, it took me 3 phone calls each time expalining in painful detail how to make the traction control kick on at under 5 mph. Of course, each time i was treated as some idiot who reads crap on the internet and then incorrectly diagnioses his own truck. I am sympathetic b/c i am sure that must happen all day, but thought i would share my experince.
01Konvict - i dont think you have the same problem, although yours may also be caused by a bad sensor. my issue was the traction control/abs kicking on when on dry pavement under 5mph.