It seems the Novell Client 4.91 SP2 has an issue with Pervasive 8.x on Windows 2003 servers.

The configuration is as follows:
Windows 2003 Server - Basic install, SP1, all the latest MS Windows 2003 updates
PervasiveSQL NT Server V8.7.014 for Windows - Passes all tests during installation.
Novell Client 4.91 SP2
- using Workstation login for test, doesn't matter if logged into Network

If I use the ODBC Administrator | System DSN | Choose DEMODATA | Configure | Test, I receive this error
[Pervasive][ODBC Client Interface][LNA][Pervasive][ODBC Engine Interface][Data Record Manager]The specified filename is invalid (Btrieve Error 11)

I cannot access any of the local Pervasive data. I can create a new local or remote Pervasive database in the Pervasive Control Center, but still cannot access the database.

Check and tried all sorts of fixes, workarounds, but nothing helped.
Remove the Novell Client, and do the test again, the test reports 'Connection Successful'

So I try the Novell Client 4.91 with no SP and the test passes, I can access local and remote Pervasive databases.
So I install 4.91 SP1, and the test passes and can access local and remote Pervasive databases.
So I install 4.91 SP2 and the test fails with the above message and cannot access local or remote Pervasive databases.
Tried Pervasive 8.6 and 8.5 versions of PervasiveSQL for Windows.

Conclusion: Novell Client 4.91 SP2 somehow interferes with PervasiceSQL to find the physical databases even after a creation of an new database.

Any thoughts, resolutions, fixes?