See:
You receive a "The operation cannot be completed because of dialog or data base
engine failures" error message when you try to perform a mail merge by using an
Outlook 2003 contact folder in Publisher 2003
http://support.microsoft.com/kb/908474/en-us

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Mary Sauer MSFT MVP
http://office.microsoft.com/
http://msauer.mvps.org/
news://msnews.microsoft.com
>I am trying to do a mail merge in a publisher document with an excel file of
> addresses. It keeps telling me database engine failure. How do I correct
> this error?