It sounds like you have created an ODBC Engine DSN, and the data files you are trying to open reside on a computer that has an older version of the Pervasive engine (or Btrieve 6.x) on it. The Status Code 1 would likely come about as a result of the newer PSQLv10 SQL engine attempting to send requests to a remote Btrieve engine that doesn't understand the incoming requests.
First things first -- check to see if the server (where the files reside) has an older engine on it. Disable the engine (if you are not using it). If it is in use, then switch back the the matching ODBC driver for that version.
Keep in mind that PSQLv10 was the first version officially supported on Win7, so you may have to do things like disable UAC or stuff like that. You can try the 18-page Vista white paper (which explained how to get PSQLv9 working with Vista), of which you can find a copy here:
Another potential problem older versions used a 16-bit installer which simply won't run on a 64-bit computer. If you find this, then upgrading the entire environment to PSQLv10 (or the newer PSQLv11) is the best course of action.