A. Q. A query produces this error in SQL 7 'Internal Query Processor Error'.

The full error is "Internal Query Processor Error: The query processor could not produce a query plan."

This means that the query processor/optimiser is "confused". With SQL 6.5 these sorts of queries would typically produce access violations which could potentially affect the whole of SQL Server. In SQL 7.0 the problem is handled a bit better - with this error being produced. 

However, it is still really a bug, and you should report it to Microsoft as a bug.

Sometimes queries will work ok on SMP systems but not on single-processor systems - this is due to the fact that query parallelisation is available on SMP boxes.

In order for Microsoft to resolve a bug they need to re-create it on their systems. The best way to do this is to provide them with a repro script - this needs to show the problem when run on a brand-new install of SQL Server on a new database. Therefore it needs to contain all tables, user defined data types, triggers, views etc. needed to show the problem. If it needs data then try and keep this to a minimum. 

If the script/data is reasonably short then post to one of the newsgroups and one of MVP's can report it to Microsoft for you. (See reproscript.txt for more information)