All you should need to do is run though the wizards to get everything setup. Are they the same version of SQL Server?
Try running the merge agent from a command line on the subscriber and see what the specific error is. To do this edit the SQL Agent Job on the subscriber which is the merge agent. Copy the text from step two. Open a command window and navigate to the folder with the merge.exe in it. It should be c:\program files\Microsoft SQL Server\90\com\ by default. Type in merge.exe a space and then paste in the text that you copied from the agent. Press enter and see what comes up.