Object saved before validated?

Hey,

I'm having a weird problem: When I add a product via webform it's being
saved before validated.

Example: I fill out the form for a product named "Test", I forget to
type in the price so the error "Price can't be blank" and it returns to
the form. After I typed in a price it says "Product 'Test' already
exists" because it's been saved the first time already.

Controller:
def create_product
    Product.prepare_to_save(params[:product])
    @product = Product.new(params[:product])
    respond_to do |format|
      if @product.save
        flash[:notice] = 'Product was successfully created.'
        format.html { redirect_to :action => 'index' }
        format.xml  { render :xml => @product, :status => :created,
:location => @product }
      else
        format.html { render :action => "new_product" }
        format.xml  { render :xml => @product.errors, :status =>
:unprocessable_entity }
      end
    end
  end

Model: