There are two situations in which you can receive this error.
Situation #1
The filename you have specified to save the merged document as, is greater than 28 characters.
Ex.
Filename: Introduction to Report Templates
will not work.
Filename: Introduction to Report Temp
will work.
You can not have a filename who's character length is greater than 28.
Situation #2
Microsoft
Word has created a macro called tmpDDE which was the result of the
break in connection between DayLite, Applescript and Word.
You can resolve this issue by...
Open Word.
Click on Tools in the menu bar.
Select Macros from the list.
Select Macros... from the list.
The Macros window will appear.
Delete any instances of a macro named tmpDDE from this window.
Once you have deleted all instances of the tmpDDE macro, click on the Organizer... button.
Click on the Macro Project Items tab.
Remove all instances of a macro named tmpDDE from this window.