Several reports now point to a significant problem with PC Exchange 2.1.1 (as included with Mac OS 7.6 and 7.6.1). In particular, the most common report is an inability for the Mac to access files originally copied to a DOS-formatted floppy disk from a PC (Thanks, David Meimann and Tim Foley).
Similarly, Clay Courtney reported that, using PC Exchange 2.1.1 on either a IIsi or and Centris 650, PC text data files from a DOS-formatted floppy disk would not load correctly.
In a more serious case of this problem, Todd Wiblin writes that he got a "Type 11 error or freeze when trying to access PowerPoint files from DOS disk."
Willi Murray reported the "reverse" problem: if he copies files from his Mac to a DOS-formatted disk, these files are inaccessible when the disk is inserted into a PC (they remain accessible on the Mac).
In every case reported, reverting to the version of PC Exchange that came with 7.5.5 eliminates the problem. There are also reports of these problems on Apple's Mac OS Discussion board.