In order to use placeholders, put a '?' whereever you will need to plug data into the statement. Your UPDATE statement then becomes:

my $sth = $dbh->prepare("UPDATE Servers SET nic1_driver_version=? WHER
+E Server=?");
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Then, pass the values to plug into those placeholders to execute like so:

$sth->execute($driver,$servlist);
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The statement doesn't need to change from one execution of the loop to the next. Therefore, the prepare can be done outside the loop. The values change each iteration and get plugged into the statement at execute time inside the loop.

I now have:

#! C:\perl\bin\perl.exe -w

use DBI;
#use strict;

my $DSN='Database';
my $driver;
my $servlist;

#connect to database
my $dbh=DBI->connect("dbi:ODBC:$DSN", "admin", "") || die;
my $sqlstatement=("UPDATE Servers SET Servers.nic1_driver_version=? WH
+ERE server=?");
my $sth=$dbh->prepare($sqlstatement);

#Open file for reading
open(INPUT,"file.txt") || die;
while (<INPUT>)
    {
    chomp;
    my ($servlist, $driver)=split(/,/);
    $sth->execute ($driver,$servlist) || die;
    }
close (INPUT);
$dbh->disconnect;
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but still get:

DBD::ODBC::st execute failed: Microsoft ODBC Microsoft Access Driver Too few parameters. Expected 3. (SQL-07002)(DBD: st_execute/SQLExecute err=-1) at C:\Perl\scripts\test\newer.pl line 21, <INPUT> line 1.
Died at C:\Perl\scripts\test\newer.pl line 21, <INPUT> line 1.

Thanks again,
jw