error 3 on remote PCs

I previously used Xmarks with Firefox 2 only and never had a problem. I have upgraded to Firefox 3.5.2 and installed Xmarks for IE 8 on my office machine. Sync works between Firefox and IE on the office machine but I cannot sync to any of my other machines where all I want to do is sync with Firefox. I get a Xmarks message saying it has detected a new file on the server and what do I want to do, both merge and download fail with error message 3. I have tried a clean reinstall of Firefox, I have tried setting a new user profile in firefox, also have deleted account and created a new one and I have tried deleting the places.sqlite , places.sqlite-journal files from my profile, all to no avail.

What else should I try?