Geoff,

Sorry, I posted the wrong fix.  Here is the e-mail I got from Tivoli
Support:

Rick, this looks like a known problem. From the fix's readme:
   This is FIXTEST Version 1.1.2.01.  It includes the following fix:
   -  IC26111
      If a SQL Server 7.0 database is at compatibility level 60 or 65, an
      attempt to backup the database or its transaction log would result
      in the DB-Lib message "Incorrect syntax near the keyword
      'database'" and the backup would fail.  This no longer occurs.
      Databases at any compatibility level can now be backed up
      successfully.The fix is available at:
ftp://ftp.software.ibm.com/storage/tivoli-storage-management/patches/agents/
ntsql/1.1.2/
Please let us know if this doesn't fix your problem or if you have any
further problems.Bob Kingbobking AT us.ibm DOT com

Rick Smith
Storage Management
State Farm Insurance
(309) 735-3086