Jason,
Have you tried it? I've never been able to catch print statements from stored procs with an error handler ( DBD::Sybase Version 1.61 and Sybase 12.5.x).

I tried using your error handler on a tempdb table I created

!/usr/local/bin/perl

use strict;
use DBI;

my $dbh = DBI->connect("dbi:Sybase:server=xxx", "u", "p",
  { PrintError => 0, syb_err_handler => \&syb_error_handler } );
$dbh->do( "use tempdb" );
my $sql = "exec sp_rename derby, derby1";
$dbh->do( $sql );

sub syb_err_handler {
    my ($err, $sev, $state, $line, $server, $proc, $msg, $sql, $err_ty
+pe) = @_;
    my $ERROR = 1;
    my $WARNING = 0;
    my $return_code = $ERROR;
    if ( ($err == 131) && ($sev == 5) ) {
        ## Connection attempt failed
        return $ERROR;
    } elsif ( ($err == 0) && ($sev == 10) && ($state == 1) ) {
        if ( $msg =~ m/Active traceflags:/i ) {
            process_dbcc_list($msg);
            $return_code = $WARNING;
        } else {
            unless ( $msg =~ m/^\s+$/ ) {
                chomp $msg;
                print $msg . "\n";
            }
        }
        $return_code = $WARNING;
    } elsif ( ($err == 3) && ($sev == 5) ) {
        print "err: $msg\n";
        $return_code = $ERROR;
    }
    return ($return_code);
}
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Just didn't work. The print statement was not caught by the error handler and was outputted to STDERR.