D5 & MS-SQL Server 7 Licencing Issues

I'm looking for details about licencing with Delphi 5 and MS Sql Server
7, as I've been given conflicting advice so far.
On one hand, I've heard that a licence is required per user (which sounds
sensible to me), but other people say that each connection requires a
licence. As my application would be connected to both a 'system tables'
database and a 'data' database would this require 2 licences per user?

Also, I've been advised to use a separate ADOconnection per (non-modal)
form (to allow for transaction rollback). If this means that multiple
licences are required per user then SQL Server 7 may prove too expensive
for our application.

Finally, can anyone clarify the effect of the licencing choice which
applies when installing Sql Server on NT.

Finally (again!) - what happens if all the user licenses are in use when
my application tries to connect - can I trap this?

Thanks for all advice.