I too am seeing this error and despite a rather extensive search (by my standards), this thread is the only related item and it is unresolved!
Dom: Did you by any chance determine the cause?
I wrote up my version of the error here:
http://stackoverflow.com/questions/9930696/are-prepared-statements-supported-in-embedded-mysql
Essentially, I can successfully connect to either my live test server, or to the embedded server (i.e. all initialization seems to occur successfully). On the embedded server, I can issue plain mysql_query/mysql_real_query statements successfully (e.g.: create, set, select etc) but even if I do nothing but connect then after a proper and normal mysql_stmt_prepare, bind, execute sequence. I get "out of sync" as soon as mysql_stmt_fetch is called.
Is there a setting I missed? Or a page that says "prepared statements aren't supported with embedded mysql" ?
Best Regards,
Ken Kavanagh