Here is what MSDN has on the subject:

Updatable Subscriptions
Data at the Subscriber can be modified if you use merge replication or if you use snapshot replication or transactional replication with an updatable subscription option.

Updatable subscription options available with snapshot replication and transactional replication allow you to make changes to replicated data at the Subscriber and propagate those changes to the Publisher and to other Subscribers. Updatable subscription options include immediate updating, queued updating, and immediate updating with queued updating as a failover.

Immediate updating allows Subscribers to update data only if the Publisher will accept them immediately. If the changes are accepted at the Publisher, they are propagated to other Subscribers. The Subscriber must be continuously and reliably connected to the Publisher to make changes at the Subscriber.

Queued updating allows Subscribers to modify data and store those data modifications in a queue while disconnected from the Publisher for a period of time. When the Subscriber reconnects to the Publisher, the changes are propagated to the Publisher. If the Publisher accepts the changes, normal replication processes occur and the changes are propagated to other Subscribers from the Publisher. You can store data modifications in a SQL Server 2000 queue or use Microsoft Message Queuing.

Immediate updating with the queued updating option allows you to use immediate updating and switch to queued updating if a connection cannot be maintained between the Publisher and Subscribers. After switching to queued updating, reconnecting to the Publisher, and emptying the queue, you can switch back to immediate updating mode.

When using merge replication, data at the Subscriber is automatically updatable.