client encoding mismatch

Hello,

I am getting the following error:
    client encoding mismatch
    State:22003,Native:214,Origin:

Using the function "SQLDriverConnect"
with the connection string
"DSN=PostgreSQL;Servername=server;UID=user;Password=xxxxxx;Database=database
;"

OS: Windows 2000
Postgresql Server 8.1.3
ODBC: 7.03.01.14 'PostgreSQL' driver
(Want to retain, because I am also accessing a 7.x database)

I have done the following:
SET CLIENT_ENCODING TO 'SQL_ASCII';

but the encoding keeps coming back as "UTF8" or "WIN1251"

Please help.

Brian