If you are getting the message "Another log reader is replicating the database" after you have been trying to mark transactions as replicated, a possible cause is that you have been using query analyzer to try running sp_repldone AND that you have left this query window open after going on to try other things. I am of the opinion that SQL Server then sees this connection as being a logreader (because of course logreader calls sp_repldone as well).

So try closing query analyzer and see whether this message goes away. It did with me!