Is it possible to direct Writer output into a new or existing ESRI feature data set (SDE)

Yes you need to insert the SDE writer and the IMPORT the feature type you want to insert data into (or update or delete)

Usually inserting a writer prompt you to insert a new feature type, but in this case you want to import an existing.

See the following link for more info.

Hope this helps

fme-2-sde-feature-dataset.pngHi Itay,

Just to clarify, if the Feature Dataset is created, but holds no feature classes (yet). Although the import via SDE connection string is functional, the dialogue box does not list the Feature Data set as a Table or an option. I have attached a screen shot of my FME canvas and the Import dialogue box results.

The name of the Feature Data Set is a parameter on the SDE Writer feature type. If the FDS exists the table will be created in the FDS, if it does not exist the FDS will be created by the writer.