David,
I can't speak for FoxPro->FoxPro OLE DB Provider usage, as I've never tried that.
However, I generally recommend the use of either SQL Server or MSDE if you're planning on accessing data from .NET assemblies. Better scalability, more security, better transaction handling, better integration, better overall performance as you get into larger databases, better support for stored procs and the ANSI-92 standard, etc.
The biggest limitation I've seen when using .NET with the VFP Ole DB Provider is that you can't return a result set from a VFP stored proc into an ADO.NET dataset, at least not without going to some pretty involved workarounds.
I'd still be interested if anyone knows the answer to your first problem, because I would have 'expected' 1.8 to come back. But it wouldn't change my thinking that there are better solutions for a back-end database.
Kevin