Blackberry users can't get on the internet - MDS service not working

Blackberry users could use the internet up to about 1 month ago. I've been on leave, so it has been left until now.
We have Blackberry Professional Software version - with Blackberry manager software version, and the Connection service lists itself as
We are running this on Windows Server 2003 domain controller, with Exchange server 2003 installed, though we have an Exchange server 2007 in our environment as well.
The event viewer error is:
Event Type:      Error
Event Source:      BlackBerry MDS Connection Service
Event Category:      None
Event ID:      15000
Date:            8/09/2010
Time:            1:20:06 PM
User:            N/A
Computer:      JABIRU
<2010-09-08 13:20:06.905 GMT+08:00>:[73]:<MDS-CS_JABIRU_MDS-CS_1>:<ERROR>:<LAYER = SCM, EVENT = java.sql.SQLException: Specified driver could not be loaded due to system error  126 (SQL Server).>

I have logging on, and the MDAT log has the same error in many ways. See attached.
I have opened Blackberry Server Configuration and clicked the Test Database Login, and it returns successfully.
I have removed old versions of Java, and have made sure I have the latest version.
A microsoft kb article (not related to Blackberry) suggested that an error 126 (SQL Server) could come from sqlsvr.dll being missing from the system32 folder - I checked and I do not have it there, but I don't know where to get a replacement from.

I feel like I'm clutching at straws here, so time to ask for help.

Who is Participating?
sibisteanuConnect With a Mentor Commented:
Please find attached file from my configuration which is similar to yours.
chilternPCConnect With a Mentor Commented:
I think its complaining it can't find this file:


also check the registry key as specified here:

If this not working I recommend to put back the old java version and to check the user witch start the service. I recommend to start all blackberry service with the BES admin user,
kenc45Author Commented:
Thanks so much for your quick answers.
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