i am able to connect to MySQL database on the server from my ASP.NET application on the server.. i am using the following connection string..
Driver={MySQL ODBC 3.51 Driver};Server=localhost;Database=mydbname;uid=myu sername;pwd=mypassword;option=3
where
mydbname is the name of the database i created using the control panel
myusername is the username and
mypassword is the password which i provided when i created the database

but i am not able to connect to the database on the server when i run the application in my machine.. i tried the following connection string..
Driver={MySQL ODBC 3.51 Driver};Server=mydomainname;Database=mydbname;uid= myusername;pwd=mypassword;option=3
where
mydomainname is the domain name (eg: google.com)

i am getting the following error

Data source name not found and no default driver specified at System.Data.Odbc.OdbcConnection.Open()

is it cos i dont have MySQL driver in my machine???

Take a look at http://www.mysql.com/products/connector/net/.
As you are using ASP.net you are developing on a windows machine (unless you've managed to get ASP.net to run on linux ) you will need to install the MySQL connection driver before you can utilise it.

yes i am running the application in windows.. but do i need to install MySQL driver 3.51? the database is not in my system.. its on the server..

Then you gonna have to install the connectors only I guess

You need to install MySQL ODBC Driver on each machine you are going to use the .NET application, even the development pc.