Removing Replication on SQL Server 2008

Yes you can write your own Replication, but it isn't necessary. You can use SQL Server Replication between the two data centers without a VPN between them (a VPN is always preferred).

Before configuring Replication I'd urge you to look at SQL Server's Database Mirroring between the two sites. Database Mirroring will give you an exact copy of the database on the other site.

In either case you simply need to open the correct TCP ports in the firewalls at both sites (and configure NAT on both sites between a public IP and the private IP if the SQL Servers have private IPs). Then simply tell the Replication or database mirroring to use the public IP of the remote SQL Server as the replication or mirroring partner.

As I said above, you'll want to setup a VPN between the sites so that you can route all your Active Directory replication traffic over that VPN, as well as all your administrative traffic when you are managing the remote machines.

From joeqwerty's comments:

I just noticed in your errors that it looks like you're using named pipes on OTTO to connect to WEBDB3. Try configuring OTTO to use TCP\IP to connect to WEBDB3. Named pipes requires file and print sharing traffic to be able to transit the firewalls, which is probably being blocked.

Use the SQL client configuration utility on OTTO to change the connection parameters for WEBDB3 to use TCP\IP. If you don't have the client configuration utility installed you can configure an ODBC DSN to use TCP\IP for the connection to WEBDB3.