Location
Since v5.00, AC creates a subfolder called "clipdatabase" to store all Popup, Removed, and Permanent Clips. The name of the database for the current machine is clips[MachineName].dat, where [MachineName] is the name of your PC. If ArsClip is being run from a USB drive (eg. thumb drive), the name of the database will be "clips.dat".
Format
The .DAT files are actually standard SQLite databases. You can open them with any SQLite database manager programs to peform functions like "integrity check". I currently use SQLiteStudio freeware as my manager.
Error message
When the program is starting, ArsClip performs and initial check on the version of the database. If this fails, AC will show the above error message and terminate.
This error sometimes occur when an external program locks the database file. If the error stops showing after re-running the program or rebooting the system, the database is likely not corrupt.
You can use a SQLite database manager to perform a repair if rebooting did not solve the issue (see "Format" post above).