Hi,
What version of MySQL are you connecting to?
Officially Autodesk only support MySQL 5.0.22 and if you use the libmySQL.dll from a newer version, like the current 5.0.41 it won't work. But there is a workaround, you can connect to the current release, 5.0.41, if you use the old libmySQL.dll.
I got the old dll here so if you want it, just send me an e-mail. (mans dot beckman at manandmachine dot se)