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Trying to open an ADO connection using the 'ESRI OLE DB provider' and 'ArcSDE Direct Connect' in a stand alone application will fail with the following error:
-2147216127 : Automation error
The local system path variable does not include the location for the SDE Direct Connect DLLs.
The %ARCHOME%\bin directory must be included in the local path variable for this to work correctly from a stand-alone client application.