Hi Edward,
actually the question was phrased "In which quadrant of the coordinate plane does the point (x, y) lie?"
As 0,0 does not lie in any quadrant, I interpreted this as meaning that x,y does lie in a quadrant, which is why I did not consider the possibility of both x and y equalling zero. That is, I read the english in the question as presupposing that x,y lay in a quadrant.
GMAT takes a lot of pains to make sure there is no ambiguity in questions, but if you think there are multiple reasonable interpretations of some english, then just adopt the interpretation that makes the most common sense.
That said, the rule for data sufficiency is: no assumptions. Accordingly, on this question, it would have been safer to consider that x,y could be 0,0. And, interestingly enough, if a statement had yielded a solution of 0,0 and only 0,0, then that statement would have been sufficient becuase the answer to the question would be certain ("x,y does not lie in any quadrant".)
Kaplan Teacher in Toronto