I'm using Terminal Server 4.0 SP4.
To install the mdac I simply run the mdac_typ.exe.

I've read in the MDAC Readme (mdac21rd.txt) the following:
2.3 The MDAC 2.1 redist is not supported on Terminal Server.

I'm trying to connect to SQL Server 7.0 in other computer, and it returns an error.