Define Workspace for SDE Connection in Python

Examples 3 through 5 on this page are amazing for this problem: http://help.arcgis.com/en/arcgisdesktop/10.0/help/index.html#//0017000000q7000000

Here is a simplified version I made that lets me do on the fly connections in python using Sql Server direct connect only.

"""
Name: sdeconn.py
Description: Utility functions for sde connections
"""

# Import system modules
import arcpy, os, sys

def connect(database, server="<default server>", username="<default user>", password="<default password>", version="SDE.DEFAULT"):
    # Check if value entered for option
    try:
        #Usage parameters for spatial database connection to upgrade
        service = "sde:sqlserver:" + server 
        account_authentication = 'DATABASE_AUTH'
        version = version.upper()
        database = database.lower()

        # Check if direct connection
        if service.find(":") <> -1:  #This is direct connect
            ServiceConnFileName = service.replace(":", "")
            ServiceConnFileName = ServiceConnFileName.replace(";", "")
            ServiceConnFileName = ServiceConnFileName.replace("=", "")
            ServiceConnFileName = ServiceConnFileName.replace("/", "")
            ServiceConnFileName = ServiceConnFileName.replace("\\", "")
        else:
            arcpy.AddMessage("\n+++++++++")
            arcpy.AddMessage("Exiting!!")
            arcpy.AddMessage("+++++++++")
            sys.exit("\nSyntax for a direct connection in the Service parameter is required for geodatabase upgrade.")

        # Local variables
        Conn_File_NameT = server + "_" + ServiceConnFileName + "_" + database + "_" + username    

        if os.environ.get("TEMP") == None:
            temp = "c:\\temp"   
        else:
            temp = os.environ.get("TEMP")

        if os.environ.get("TMP") == None:
            temp = "/usr/tmp"       
        else:
            temp = os.environ.get("TMP")  

        Connection_File_Name = temp + os.sep + Conn_File_NameT + ".sde"
        if os.path.isfile(Connection_File_Name):
            return Connection_File_Name

        # Check for the .sde file and delete it if present
        arcpy.env.overwriteOutput=True


        # Variables defined within the script; other variable options commented out at the end of the line
        saveUserInfo = "SAVE_USERNAME" #DO_NOT_SAVE_USERNAME
        saveVersionInfo = "SAVE_VERSION" #DO_NOT_SAVE_VERSION


        print "\nCreating ArcSDE Connection File...\n"
        # Process: Create ArcSDE Connection File...
        # Usage: out_folder_path, out_name, server, service, database, account_authentication, username, password, save_username_password, version,   save_version_info
        print temp
        print Conn_File_NameT
        print server
        print service
        print database
        print account_authentication
        print username
        print password
        print saveUserInfo
        print version
        print saveVersionInfo
        arcpy.CreateArcSDEConnectionFile_management(temp, Conn_File_NameT, server, service, database, account_authentication, username, password, saveUserInfo, version, saveVersionInfo)
        for i in range(arcpy.GetMessageCount()):
            if "000565" in arcpy.GetMessage(i):   #Check if database connection was successful
                arcpy.AddReturnMessage(i)
                arcpy.AddMessage("\n+++++++++")
                arcpy.AddMessage("Exiting!!")
                arcpy.AddMessage("+++++++++\n")
                sys.exit(3)            
            else:
                arcpy.AddReturnMessage(i)
                arcpy.AddMessage("+++++++++\n")
                return Connection_File_Name
    #Check if no value entered for option   
    except SystemExit as e:
        print e.code
        return

Using this script, I can make a connection file on the fly by simply calling:

import arcpy, sdeconn
myconnect1 = sdeconn.connect("database1", "server")
myconnect2 = sdeconn.connect("database2", "server")

This eliminates the problem of database connection files being inconsistent from machine to machine or user profile to user profile.

D.E.Wright just beat me to it, he's right on, use a connection just like in ArcCatalog. But here's my take, done at the Python prompt in ArcMap, using the direct full path to a sde connection file:

>>> import arcpy
>>> arcpy.env.workspace = "C:\\Users\\chad\\AppData\\Roaming\\ESRI\\Desktop10.0\\ArcCatalog\\anrc_water (anrcuser).sde"
>>> fdlist = arcpy.ListDatasets()
>>> for fd in fdlist:
...     print fd
... 
anrc_water.DBO.ChadTest
anrc_water.DBO.Temp_Data
anrc_water.DBO.Master_Datasets
ANRC_WATER.DBO.ENF_FILL_FACC
ANRC_WATER.DBO.ENF_FILL_FDIR

>>> 

To get the path to my sde connection file, I just right-clicked on my SDE database in the Catalog tree, went to properties, then on the General tab, copy the path from the Name field:

You need to define your SDE connection document as you would normally in ArcCatalog; Then you will create the path to the layer in Python like this:

DataConnections = "C:\\AGS_GCSS_Tools\\DatabaseConnections\\" 
TCA_Connection = "prod_sde.sde\\prod_SDE.GIS.PropertyTax" + CAPSYear + "\\prod_SDE.GIS.Tca"
TCA_Layer = DataConnections + TCA_Connection

This will set your path to where your .SDE file lives, but then you set the path inside that connection to the layer you are looking for. In my case I also set a Year variable.