BOL states When upgrading to Microsoft® SQL Server™ 2000, you can upgrade servers in your organization one at a time; however, when servers are used for replication, you must upgrade the Distributor first, the Publisher second, and then Subscribers. Upgrading servers one at a time following this sequence is recommended when a large number of Publishers and Subscribers exist because you can continue to replicate data even though servers are running different versions of SQL Server. You can create new publications and subscriptions with servers running instances of SQL Server 2000, and still maintain subscriptions created in SQL Server 6.5 or SQL Server 7.0.
Check the compatibility of the databases that are being upgraded, they must be in 70.
SQL Server MVP