The approach ban applies to RVRs, not aircraft malfunctions. And, as stated above, it's actually the outer marker - 1000'AGL only applies if there's no marker or equivalent position. (In UK Air Law, anyway - I think it's different in some other countries.)
My airline's SOPs say that, unless you're visual, there should be a go-around for any malfunction below 1000' other than a land ASAP emergency. Has always seemed sensible to me - do you really want to be sorting things out at 500/600 feet?
(Edited because EPRman beat me to it about the OM position!)
[ 06 December 2001: Message edited by: tired ]