Only TDSVER=4.2 works when connecting to MS SQL 2005

My setup is :
	MS SQL 2005 running under Win 2003,
	Latest 0.91 version of FreeTDS under Unix (SCO)
	I build it with ./configure --enable-msdblib --with-tdsver=7.2
	I use $HOME/.freetds.conf to configure connection

I can connect to the db only when my tds version is set to 4.2, 
when I tried 7, 7.1, 7.2, 8 it fails to connect.

My question - would it be limiting factor? 
I will need to work with SQL 2005 and 2008, I am not planning on using bcp.

Thanks in advance.

+++
Just in case I post the log and dump  below:

log.c:196:Starting log file for FreeTDS 0.91
        on 2011-08-22 14:36:28 with debug flags 0x4fff.
config.c:185:Getting connection information for [mydb].
config.c:189:Attempting to read conf files.
config.c:354:... $FREETDSCONF not set.  Trying $FREETDS/etc.
config.c:367:... $FREETDS not set.  Trying $HOME.
config.c:297:Found conf file '/u/test/.freetds.conf' (.freetds.conf).
config.c:483:Looking for section global.
config.c:540:   Found section global.
config.c:543:Got a match.
config.c:565:   tds version = '7'
config.c:565:   debug flags = '0xffff'
config.c:565:   text size = '64512'
config.c:540:   Found section mydb.
config.c:554:   Reached EOF
config.c:483:Looking for section mydb.
config.c:540:   Found section global.
config.c:540:   Found section mydb.
config.c:543:Got a match.
config.c:565:   host = 'mydb.dummy.com'
config.c:595:Found host entry mydb.dummy.com.
config.c:599:IP addr is 192.168.1.30.
config.c:565:   port = '1433'
config.c:565:   tds version = '7.1'
config.c:788:Setting tds version to 7.1 (0x701) from $TDSVER.
config.c:554:   Reached EOF
config.c:301:Success: [mydb] defined in /u/test/.freetds.conf.
config.c:714:Setting 'dump_file' to 'tdsdump.log' from $TDSDUMP.
config.c:224:Final connection parameters:
config.c:225:            server_name = mydb
config.c:226:       server_host_name = mydb.dummy.com
config.c:227:                ip_addr = 192.168.1.30
config.c:228:          instance_name = 
config.c:229:                   port = 1433
config.c:230:          major_version = 7
config.c:231:          minor_version = 1
config.c:232:             block_size = 0
config.c:233:               language = us_english
config.c:234:         server_charset = 
config.c:235:        connect_timeout = 0
config.c:236:       client_host_name = test.dummy.com
config.c:237:         client_charset = 
config.c:238:               app_name = TEST2
config.c:239:              user_name = sa
config.c:242:                library = DB-Library
config.c:243:              bulk_copy = 0
config.c:244:      suppress_language = 0
config.c:245:          encrypt level = 0
config.c:246:          query_timeout = 0
config.c:249:               database = 
config.c:250:              dump_file = tdsdump.log
config.c:251:            debug_flags = ffff
config.c:252:              text_size = 64512
config.c:253:           broken_dates = 0
config.c:254:     emul_little_endian = 0
config.c:255:      server_realm_name = 



And dump is below:

14:36:28.594593 3933 (log.c:196):Starting log file for FreeTDS 0.91
        on 2011-08-22 14:36:28 with debug flags 0xffff.
14:36:28.594634 3933 (config.c:714):Setting 'dump_file' to 'tdsdump.log'
from $TDSDUMP.
14:36:28.594654 3933 (net.c:205):Connecting to 10.168.200.30 port 1433 (TDS
version 7.1)
14:36:28.595364 3933 (net.c:270):tds_open_socket: connect(2) returned
"Operation now in progress"
14:36:28.595391 3933 (net.c:310):tds_open_socket() succeeded
14:36:28.595404 3933 (util.c:156):Changed query state from DEAD to IDLE
14:36:28.595452 3933 (net.c:741):Sending packet
0000 12 01 00 34 00 00 00 00-00 00 15 00 06 01 00 1b |...4.... ........|
0010 00 01 02 00 1c 00 0c 03-00 28 00 04 ff 08 00 01 |........ .(......|
0020 55 00 00 02 4d 53 53 51-4c 53 65 72 76 65 72 00 |U...MSSQ LServer.|
0030 5d 0f 00 00            -                        |]...|

14:36:28.595825 3933 (net.c:555):Received header
0000 04 01 00 25 00 00 01 00-                        |...%....|

14:36:28.595861 3933 (net.c:609):Received packet
0000 04 01 00 25 00 00 01 00-00 00 15 00 06 01 00 1b |...%.... ........|
0010 00 01 02 00 1c 00 01 03-00 1d 00 00 ff 09 00 0f |........ ........|
0020 c3 00 00 02 00         -                        |.....|

14:36:28.595890 3933 (login.c:1057):detected flag 2
14:36:28.595903 3933 (login.c:782):quietly sending TDS 7+ login packet
14:36:28.595993 3933 (token.c:328):tds_process_login_tokens()
14:36:28.596508 3933 (util.c:331):tdserror(804f2fc, 80500ec, 20017, 0)
14:36:28.596526 3933 (dblib.c:7929):dbperror(804f988, 20017, 0)
14:36:28.596541 3933 (dblib.c:7981):20017: "Unexpected EOF from the server"
14:36:28.596555 3933 (dblib.c:5780):dbgetuserdata(804f988)
14:36:28.596850 3933 (dblib.c:4880):dbdead(804f988) [alive]
14:36:28.596882 3933 (dblib.c:8002):"Unexpected EOF from the server", client
returns 2 (INT_CANCEL)
14:36:28.596895 3933 (util.c:361):tdserror: client library returned
TDS_INT_CANCEL(2)
14:36:28.596906 3933 (util.c:384):tdserror: returning TDS_INT_CANCEL(2)
14:36:28.597026 3933 (util.c:156):Changed query state from IDLE to DEAD
14:36:28.597045 3933 (token.c:337):looking for login token, got  0()
14:36:28.597058 3933 (token.c:122):tds_process_default_tokens() marker is
0()
14:36:28.597069 3933 (token.c:125):leaving tds_process_default_tokens()
connection dead
14:36:28.597079 3933 (login.c:466):login packet accepted
14:36:28.597089 3933 (util.c:331):tdserror(804f2fc, 80500ec, 20002, 0)
14:36:28.597101 3933 (dblib.c:7929):dbperror(804f988, 20002, 0)
14:36:28.597115 3933 (dblib.c:7981):20002: "Adaptive Server connection
failed"
14:36:28.597125 3933 (dblib.c:5780):dbgetuserdata(804f988)
14:36:28.597447 3933 (dblib.c:4880):dbdead(804f988) [dead]


Regards,
Michael.