When I did my first demonstration with the combined SqlClient and SqlServer provider in the April CTP version of SQL Server, I was a bit surprised. I wrote a simple stored procedure to run in the server, exactly the way I've always written it to run on the client (modulo sending results back to the client):
// error handling elided
SqlConnection conn = new SqlConnection("context connection=true");
SqlCommand cmd = new SqlCommand("select * from authors", conn);
I was surprised because this produced the error:
System.Security.HostProtectionException: Attempted to perform an operation that was forbidden by the CLR host
The protected resources (only available with full trust) were: All
The demanded resources were:SharedState
After a little experimentation, I discovered they what was causing my problems was using Dispose(). Interestingly, I didn't technically need to use Dispose() (all .NET instances are available for garbage collection when the procedure invocation ends) and, in addition, using the C#/VB.NET "Using" contruct worked fine.
using (SqlConnection conn = new SqlConnection("context connection=true"))
using (SqlCommand cmd = new SqlCommand("select * from authors", conn))
After consulting the Reflector, the two methods are different because the "using" feature calls IDisposable::Dispose on the SqlCommand/SqlConnection itself (after casting). The direct Dispose() call generates a call to ComponentModel.Dispose. Both SqlConnection and SqlCommand inherit (eventually) from System.ComponentModel.Component. That's where the shared state (and the exception) comes in.
Watch out for this. Using "using" (that's Using-End Using in VB.NET) is your best bet.