Steps to reproduce:
1. Load the save provided http://forums.civfanatics.com/uploads/24121/Jon_Lloyd_BC-1640_BUG_TRADE_ROUTE_NO_SAIL.CivBeyondSwordSave
2. Build city with settler
3. End turn

Observation: Popup informing first city connected. Further city screens indicate trade routes. Note also lack of Sailing tech. or roads.

Expectation: No trade route until either Sailing is researched or a road is built between the two cities.

This was in Epic Game/Marathon with only 'Choose Religion' and 'Permanent Alliances' non standard game options selected.

Without looking, was the river route entirely within your cultural boundary? I believe that sailing is only required for river routes and coastal routes that are outside your cultural boundaries.

Erm, yes it was actually, didn't realise that proviso existed :blush:

It also exists for sea/lake shore, just FYI.