SQL 2008 Replication

We are testing ways of backing up are SQL database using replication.

So I have a test setup of 2 servers both systems running server 2008, with SQL server 2008 running.

Ive imported our database and created a local publication on one machine.

Then on the 2nd machine, the subcription is running successfully.

The problem is the snapshop agent fails during the replication with the error:
Message: Script failed for Table 'dbo.sysdiagrams'.

heres the rest of the error message:

Source: Microsoft.SqlServer.Smo
Target Site: System.Collections.Generic.IEnumerable`1[System.String] ScriptWithList(Microsoft.SqlServer.Management.Smo.DependencyCollection, Microsoft.SqlServer.Management.Smo.SqlSmoObject[])
Message: Script failed for Table 'dbo.sysdiagrams'.
Stack: at Microsoft.SqlServer.Management.Smo.Scripter.ScriptWithList(DependencyCollection depList, SqlSmoObject[] objects)
at Microsoft.SqlServer.Management.Smo.Scripter.ScriptWithList(SqlSmoObject[] objects)
at Microsoft.SqlServer.Replication.Snapshot.TransSmoScriptingManager.GenerateLogBasedArticleSchScript(Scripter scripter, BaseArticleWrapper articleWrapper, Table smoTable)
at Microsoft.SqlServer.Replication.Snapshot.TransSmoScriptingManager.GenerateLogBasedArticleScripts(ArticleScriptingBundle articleScriptingBundle)
at Microsoft.SqlServer.Replication.Snapshot.TransSmoScriptingManager.GenerateArticleScripts(ArticleScriptingBundle articleScriptingBundle)
at Microsoft.SqlServer.Replication.Snapshot.SmoScriptingManager.GenerateObjectScripts(ArticleScriptingBundle articleScriptingBundle)
at Microsoft.SqlServer.Replication.Snapshot.SmoScriptingManager.DoScripting()
at Microsoft.SqlServer.Replication.Snapshot.SqlServerSnapshotProvider.DoScripting()
at Microsoft.SqlServer.Replication.Snapshot.SqlServerSnapshotProvider.GenerateSnapshot()
at Microsoft.SqlServer.Replication.SnapshotGenerationAgent.InternalRun()
at Microsoft.SqlServer.Replication.AgentCore.Run() (Source: Microsoft.SqlServer.Smo, Error number: 0)
Get help: http://help/0
Source: Microsoft.SqlServer.Smo
Target Site: Void CheckSupportedType(Microsoft.SqlServer.Management.Smo.ScriptingOptions)
Message: Column definition in object sysdiagrams contains type VarBinaryMax, which is not supported in the target server version, SQL Server 2000.
Stack: at Microsoft.SqlServer.Management.Smo.Column.CheckSupportedType(ScriptingOptions options)
at Microsoft.SqlServer.Management.Smo.Column.VersionValidate(ScriptingOptions so)
at Microsoft.SqlServer.Management.Smo.Column.ScriptDdlCreateImpl(StringBuilder sb, ScriptingOptions so)
at Microsoft.SqlServer.Management.Smo.Column.ScriptDdl(StringCollection queries, ScriptingOptions so)
at Microsoft.SqlServer.Management.Smo.Table.ScriptTableInternal(ScriptingOptions so, StringBuilder sb, ColumnCollection columns, IndexCollection indexes)
at Microsoft.SqlServer.Management.Smo.Table.GetTableCreationScript(ScriptingOptions so, StringBuilder sb)
at Microsoft.SqlServer.Management.Smo.Table.ScriptCreate(StringCollection queries, ScriptingOptions so)
at Microsoft.SqlServer.Management.Smo.SqlSmoObject.ScriptCreateInternal(StringCollection query, ScriptingOptions so)
at Microsoft.SqlServer.Management.Smo.Scripter.ScriptWithListWorker(DependencyCollection depList, SqlSmoObject[] objects)
at Microsoft.SqlServer.Management.Smo.Scripter.ScriptWithList(DependencyCollection depList, SqlSmoObject[] objects) (Source: Microsoft.SqlServer.Smo, Error number: 0)
Get help: http://help/0

Thanks