Merge replication allows you to specify the types of Subscribers that a publication must support. Selecting Subscriber types sets the publication compatibility level, which determines which features can be used by a publication.
After a publication snapshot is created, the publication compatibility level can be increased (made more restrictive) on the General page of the Publication Properties dialog box; the compatibility level cannot be decreased.
Select each Subscriber type that this publication must support.
SQL Server 2012
The publication can use all features.
SQL Server Compact
The publication requires snapshot files to be in character format (this is handled automatically by the Snapshot Agent). SQL Server Compact also has a number of restrictions not related to compatibility level.