If the MSDE 2000 Release A runtimes is not on your computer:
1. Select Help > Download Redistributables. Mark the Other Vendors' Web Site option and download the MSDE 2000 runtime.
2. Double-click the downloaded MSDE2000A.EXE to extract the MSDE installation files to your computer.
3. Specify the path to the MSDE files when prompted when incluyding the runtime
The MSDE runtime will appear in the list. Selecting this will include the runtime in an .EXE wrapper that is placed on the computer prior to executing the .MSI. The MSDE runtime should be on the computer to add it here, but can be downloaded by following the instructions on the MSDE Release A Runtime dialog during the process of including the runtime.
If you have a blank password, this will cause this error to appear:
If you would like to use a blank SA password, you can set BLANKSAPWD=1 in the property table of the merge module. Included with this article is a link to Microsoft's article on the switches that can be used for the MSDE setup.
This issue is also applicable to SQL Server merge modules.
MSDE merge modules
SQL Server merge modules