Yeah, after the update ... basically the same error the Collin reported.
I am also running CentOS 5.x ...

[S_API FAIL] SteamAPI_Init() failed; unable to locate a running instance of 
Steam, or a local steamclient.dll.
L 07/12/2012 - 17:37:45: FATAL ERROR (shutting down): Unable to initialize 
Steam.
FATAL ERROR (shutting down): Unable to initialize Steam.

====================================================================================

Message: 3
Date: Thu, 12 Jul 2012 17:17:20 -0700 (PDT)
From: Collin Howard <my_azz...@yahoo.com>
To: Half-Life dedicated Linux server mailing list
<hlds_linux@list.valvesoftware.com>
Subject: Re: [hlds_linux] Half-Life 1 dedicated server update released
Message-ID:
<1342138640.34682.yahoomail...@web110104.mail.gq1.yahoo.com>
Content-Type: text/plain; charset=iso-8859-1

After updating my install on Centos 5, i am getting error:

[S_API FAIL] SteamAPI_Init() failed; unable to locate a running instance of 
Steam, or a local steamclient.dll.
FATAL ERROR (shutting down): Unable to initialize Steam.


========================================================================================

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