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Adding an .xls file to ArcMap returns the following error.
Error: Failed to connect to database. General function failure Unexpected error from external database driver (1).
The error is returned due to having installed one of the following Microsoft updates:
Per Microsoft, "Installing this update may cause applications based on the Microsoft JET Database Engine (Microsoft Access 2007 and older or non-Microsoft applications) to fail when creating or opening Microsoft Excel .xls files. The error message is 'Unexpected error from external database driver (1). (Microsoft JET Database Engine)'".
Microsoft have provided an update to address this issue. Click the link below and install the appropriate update patch for the version and build of the operating system.