Thanks - Yes, I need to verfiy that it is correctly installed on the remote SQL 2005.  I'll post my findings.

I also experienced the same error in a distributed installation. As per K2, this normally occurs when MSDTC is not configured properly.Try the following steps: 

1. Click Start--> Control Panel-->Add or Remove Programs.
2. Click Add/Remove Windows Components.
3. Select Application Server-->Details.
4. Select Enable network DTC access-->OK.
5. Click Next.
6. Click Finish.
7. Stop and then restart the Distributed Transaction Coordinator service.
8. Stop and then restart Microsoft SQL Server and the other resource manager services that participate in the distributed transaction, such as  Microsoft Message Queuing.
9. Restart the computer.  

If you are running Windows Server 2003 Service Pack 1 (SP1), you must follow these additional steps:

1. Control Panel-->Administrative Tools-->Component Services
2.Double click Component Services, double click Computers, right-click My Computer, and then click Properties.
3. On the MSDTC tab, click to select the following check boxes under Transaction Manager Communication:
• Allow Inbound
• Allow Outbound
4. Select the No Authentication Required
5. Make sure that the Logon Account is set to NTAUTHORITYNetworkService.
6. Click Apply. A message box explains that the MS DTC Service will be stopped and restarted, and that all dependent services will also be stopped and restarted. Click Yes.

7. Restart the computer.