Conflicts don't register with transactional replication

Hi All,

I am using SQL Server 2005 Workgroup edition installed on the client and server.  I have set up transactional replication with updatable push subsriptions. The client and server each have been replicating each others updates.

However, when I created a conflict (updated the same field in the same record with different values) the synchronization recognized that there was was "one transaction with 2 commands" to process on each end but didn't actually make any changes. Each side maintained their own updates. Meanwhile, I checked the subscription options on the publication properties and the conflict resolution policy is set to "Keep the publisher change" as we would like to happen. There are no records in the conflicts table for the subscription. Why haven't the conflicts been recognized? Isn't is possible to have conflict resolution in transactional bidirectional replication?

In case it is useful to know the client and server are both running workgroup editions of SQL Server. They are connecting via VPN and both sides can see each other.