The 1707 error is very rare.  So far, however, every occurrence has been directly related to the Novell Netware Client.  Evidently the Novell Client is modifying the Operating System in some way, possibly within the protocol bindings, that causes the 1707 error to occur.  Additionally, the Novell Client prevents a DameWare connection via IP address.  Connecting via Host Name is possible and should be considered a viable option.
 
The following is some additional information provided by Novell in a Novell Technical Information Document:
 
After installation of SP1 running an application by UNC fails if the IP address is used - TID10074283 (last modified 17APR2003)
http://support.novell.com/cgi-bin/search/searchtid.cgi?/10074283.htm
 
A manual installation of the DameWare Mini Remote Control (DMRC) Client Agent Service is another possible work-around. 

In versions 3.x and 4.x, the DameWare Installer Tool (Service Install & Remove Wizard from the menu or run the DWRCINS.exe file) can be used to create a custom installer package that can be run from a login script, network share, or via email distribution.  In version 4.5, packages created by the Service Install & Remove Wizard are compatible with Windows 95/98/Me/NT4/2000/XP/2003.  Packages created by the Service Install & Remove Wizard in versions prior to 4.5 are only compatible with Windows 95/98/Me.

Version 6.x includes a feature called DameWare Mini Remote Control Client Agent MSI Builder.  The MSI Builder will build an MSI package that can be downloaded on a remote machine.  When ran from the remote machine, it will install the DMRC Client Agent Service and configure the necessary ports on the remote machine to allow a remote connection to take place.  For more information as well as "How To" instructions on using DameWare's MSI Builder, click on the following link:

How to Create an MSI package via DameWare MRC Client Agent MSI Builder
http://www.dameware.com/support/kb/article.aspx?ID=300090