Uninstalling the 3.51.10 driver and installing the 3.51.09 driver allows access with both System and User dns from Visual FoxPro as well as from xCase. Note that to use the latest MySQL 4.1.8+, you need to configure the user table to use the older form of passwords as described on page:
http://dev.mysql.com/doc/mysql/en/Old_client.html
This solves the problem for me.
Ted Roche, MCSE, MCSE
Ted Roche & Associates, LLC
http://www.tedroche.com
Ted Roche, MCSE, MCSD
Ted Roche & Associates, LLC
http://www.tedroche.com