'Unable to start, server not found' Problems using ASA

Hello all.

I have recently taken a new application which uses Sybase ASA database. I have very minimal experience of SQL databases, so I have a very steep learning curve.

I have installed the application on a Windows XP machine. When I go to a remote PC, another Windows XP box, to install the application I need to be able to connect to the database on Machine 1. I have the ASA server running on Machine 1, but I cannot connect to it from Machine 2. When I start the server it loads up great using TCPIP on port 2638. I get the following error:
SQLSTATE=IM003
Specified driver could not be loaded due to system error 126 (Adaptive Server Anywhere 8)

When I try to log on to the database server from Machine 2 using dbisqlc.exe I get the error: Database server not found

Under the network tab I have specified the IP address of Machine 1 using 'host=', but still nothing.

I have switched off the firewall on both Windows XP machine, by switching off the 'Windows Firewall/Internet Conncetion Sharing' service in the Services.

I have also switched off the anti virus on both machines, still nothing.

I have also tried installing the database server on a WIndows 2000 box, but I still cannot connect to the database.

I would appreciate any help. Please understand I really don't have much experience of ASA. I am hoping to take a Sybase course within the next few weeks.

Many Thanks