I had an opposite issue (needed to add an "Insert new row" option where it was missing), and did this:

1. configure the Form, remove the embedded list from the form

2. configure Form's related lists (so essentially add the same list, but as a Related not Embedded list)

3. right click and configure List Controls,set the List edit insert row checkbox accordingly, save

4. configure the Form, add the related list on the form again (note that it will be automatically removed as the Related list)

5. tada!

//Rafal