Normally, when either UFT or your ALM client browser complains about not being able to download client components from the ALM server, it's a sign of these components being ''hijacked'' due to anti-virus and/or anti-malware software actively scanning and possibly quarantining these components. Make sure your anti-virus/anti-malware software has exceptions for the following on your client machine:
C:Program Files (x86)Common FilesMercury Interactive
Also, install the HP ALM Connectivity Tool and register your ALM client (both from the ALM Tools page).
You can confirm whether or not the files successfully download from the server by checking the ALM Client file paths to see of the files appear (in your case, MMerge.exe):
`%LOCALAPPDATA%HPALM-Clientatlhpalm` (if current user)
`%ALLUSERSPROFILE%HPALM-Clientatlhpalm` (if all users)