I've seen this problem several times when people have mis-matches in their Microsoft Data Access Components (MDAC). When these stacks contain mis-matches WDS is unable to query the index that it creates. Could you please run the Microsoft MDAC checker and let me know what you find out
If you find that there are mis-matches in the MDAC stack there are a few options available to you.
1. Microsoft has some instructions available on repairing the MDACs.
2. You can try uninstalling and reinstalling service packs (if your service packs were not packaged with your Windows isntall).
3. You can reinstall your Operating system.
Unfortunately, if your MDAC stack has mismatches there aren't really any quick or easy solutions.
Paul Nystrom - MSFT