Solved! After re-reading this document several times I finally got it: http://www.ibphoenix.com/resources/documents/how_to/doc_103

The embedded library under OSX is the same as what would be called the exe in windows. In the /Library/Framworks/Firebird.framework folder is an executable just called "Firebird". The key text I did not understand is this "renamed the Firebird file to libfbembed.dylib". My windows experience was tripping me up because in windows you would never rename an .exe to a .dll. I dont know if its possible in windows but I've never herd of it.

--- In firebird-support@yahoogroups.com, "martinsearancke" <martin@...> wrote:
>
> Firstly I am not 100% sure I am using the embedded firebird client under OSX. The install file that I downloaded from firebirdsql.org states that it contains Classic, Superclassic & Embedded. Unlike the windows version there does not appear to be a dedicated embedded library file in the package. I have assumed that the libfbclient.dylib (renamed libgds.dylib for my use) can be used as embedded. If I am wrong then I guess thats the problem. Can someone tell me where I get the embedded dylib file?
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> If libfbclient.dylib is for embedded use also then my question remains. When I try to create the database file for the first time it fails with "Permission denied". I am trying to create this file in the users documents folder. I am using the Interbase Express components in Delphi to connect. This has served me well for years under the windows environment.
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> The full error message is...
> Exception class EIBInterBaseError with message 'I/O error during "open O_CREAT" operation for file '/Users/martin/Documents/LightFactoryShows/default.fdb" Error while trying to create file Permission denied'
>
> Thanks in advance, Martin
>