An error has occurred in Microsoft dynamics CRM Mail Merge

This problem usually happens because of three things:

1. http://support.microsoft.com/kb/954064 The transactioncurrencyid must be added as a datafield when editing template within CRM. Weird quirk URL link explains all

2. The user has not added the CRM Url to her list of Trusted Sites IE>Tools>Internet Options>security>Trusted Sites

3. Mail merge doc should be saved as XML file. Even if it is saved as xml file it could still be incorrect. Resaved the document and reattach it in Mail Templates will sort it out