>>It can be in any local directory - if referenced by ProgID or CLSID, it looks in the registry to find the component. If non-registered DLLs are referenced, they will need to belocated somewhere in the Windows search path, since there's no pointer to them via the registry. This generally means that they either need to live in one of the Windows system directories, or in the directory tha the app is run in, or in an additional folder specified in the Windows path environment setting.
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>Ed,
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>Can an ocx (used for active-x control) be non-registered if it is in the search path? My problem is that several of our install sites are ultra-sensitive about changes - especially to the system. The more I can find a way to not mess with the system folders or registry - the easier it is for me to do upgrades/installs at those sites.

Nope - you must register ActiveX/COM servers. The registry is used to resolve a ProgID or CLSID to a server.