Well, That explains it, careless mistake, i installed ArcSDE in the ArcGIS/ArcSDE rather than ArcGIS. I had assumed the installation was in the correct directory and everything was intact since my connections were working, but it was the direct connections that were functioning, Application Server connections, which rely on the creation of Windows services during the post-install were not functioning. I figured it would be safest/easiest to uninstall ArcSDE (and delete services) for MS and reinstall in in the correct directory. Problem solved. Fortunately I am working in development. Thanks for your help, René