Hi there folks - I am getting this same error, but unfortunately Carl's explanation has not fixed it.
I have installed Lotus Client 6.5 onto my sql server.
I have also installed NotesSQL 8.0
I have configured the Lotus client for my 'test' account
I have ran and configured the NotesSQL Authentication List Manager - and created a Notes.ini in c:\windows with my test user details.
When Launching the Microsoft ODBC Administrator tool, I get the error as listed above (code 126.) This is indicative of it not being able to find the notes.ini file - which is definately in c:\windows (and this is definately in my path settings.
I'm stumped - any ideas? All help is much appreciated.