How To Build A Workflow Using A SQL DB?

I would like to build a workflow system where 100 processes are requesting an item from a ~1.000.000 items large DB, process that item and move it to the next state. The problem with the current implementation I tried is that I get deadlocks....

The DB table looks like:

CREATE TABLE Transactions(
itemid CHAR(32),
status TINYINT not null default 0,
result INT not null default 0,
lockby TINYINT not null default 0,
.... (etc.)
PRIMARY KEY(refno)
);
CREATE INDEX IxStatus on transactions (status)

Each process (with his own ID) is doing 4 step:
1) update transactions set status=1, lockby=<ID> from
(select top 1 itemid from transactions where status=0) as t1
where t1.itemid=transactions.itemid

2) select itemid from transactions where status=1 and lockby=<ID>

3) process item

4) update transactions set status=2,result=<RESULT> where itemid=<ITEMID>

Does anyone has a suggestion on how to do this?