Hi Pritpal,

> In -xhb mode hbMK2 is issueing -n switch as 
> first parameter to harbour.exe no matter if I set it as 
> -n0 whatever which probably 2007 Xharbour does not understand and 
> issued Error E001 is 
> ABC.PRG(32) Error E0001  Statement not allowed outside of procedure or
> function.
> 
> Then I tried to pass -n- as a flag in .hbp and the error disappeared.
> Is it normal behavior ?

Yes. Not having better option than -n in xhb, hbmk2 uses -n.

[ Disclaimer: I assume -n in xhb does the same as -n does 
in Harbour. If this is not true, someone will have to correct 
me. ]

> Syntax:  C:\xharbour\bin\harbour.exe <file[s][.prg]> [options]
> 
> So probably in -xhb mode, 
> C:\xharbour\bin\harbour.exe -n file(s).prg -m -w0 -es0 -D...
> -n is invening something.
> 
> Also with above flags I get in bulk warnings like:
> C:\dev_projects\some.prg(50) Warning W0001 Ambiguous reference: 'E_VAR'
> and process terminates.
> 
> Any idea, what should I look into?

Try to enclose code in PROCEDUREs.

--- hello.prg
? "hello"
---
->
--- hello.prg
PROCEDURE HELLO
? "hello"
RETURN
---

Or use '-n-'.

Viktor

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