Ensure that the App Server has registered in your client Computer. For that you should run the App Server in the Application Server Computer and the Client Computer for being registered. Then in the Client Computer go to C:/Program Files/Borland/Delphi 5/Bin(Possible place if OS: WinNT 2000) and C whether you could get the "DCOMCONFG.exe" executable. Select it. Find your App Server in it by scrolling down. If U got it, then select it and press the property button below. In the Security Tab Give permission for GUEST, SYSTEM, NETWORK as launch and Access permission. Finally go to Identity Tab and select the Interactive User.
Thats all. now Ur DCOM will work perfectly. I even got the trouble U got, but followed the above steps and BANG! everything work perfect. Wish U good luck.