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What has changed in Query Layers between ArcGIS 10.0 and 10.1?
Query layer implementation from ArcGIS 10.0 to 10.1 has changed to use the ArcSDE Workspace Factory instead of the SQL Workspace Factory to make database connections. At the 10.1 release of ArcGIS, connections to both a database or a database with the SDE Schema (geodatabase) use the SDE Workspace Factory. This change simplifies the workspace properties required to connect to all spatial databases.
In ArcGIS 10.1, creating a query layer requires the user to drag/drop a feature class into ArcMap. When the query layer is created from a geodatabase, the connection used is the same as the enterprise geodatabase connection in Desktop. For this reason, the active connection is recorded in the process information table of the SDE schema. When a query layer is created, it behaves and works like other feature layers in the geodatabase.
The .qcf files from ArcGIS 10.0 are located in C:\Documents and Settings\<user login>\Application Data\ESRI\Desktop10.0\ArcMap folder and are no longer created to persist a query layer connection in ArcGIS 10.1. However .qcf files created in ArcGIS 10.0 continue to work in ArcGIS 10.1 release.