There's a little confusion here on 3700 versions.
Version 3 was named Res3000. Version 2.6 is just 3700 v2.6.
Anything below 3.1 uses NT. 3.0
can run on w2k with a registry hack, but micros support won't touch it.
Versions 3.1 and 3.2 will run on w2k.
Versions 4.0 and above run on XP pro and win2003.
About the credit cards. This is definately not an area you want to cheap out on. There's a lot of scary things going on with identity theft and the new laws aimed at preventing it.
If you're going to run credit cards through your POS, you
cannot use 3700 v2.6. It's 8 years and 5 versions old. The new PCI laws that the credit card companies pushed through require O/S and POS software versions less than 3 versions old. They also require that credit card numbers, expiration dates and cardholder names be masked on the printed voucher. Also any CC data stored on the server or transmitted through the network or an internet connection must be encrypted. These are things that 3700 v2.6 never has and never will do. Micros isn't doing any more development on it so there will be no service packs to bring it up to speed.
I don't know about going around MerchantLink. We use them in all our restaurants and haven't had a reason to go elsewhere. Whichever way you go,
do not let anybody convince you that you're ok running cards through that system unless you get a contract stating that the system is PCI compliant with their drivers and they'll be financially responsible for non-compliancy fines if you're compromised before hitting the internet or phone lines, because these fines are staggering. If you're a single store doing average sales they can easily put you out of business. If you're compromised, the forensic audit alone costs thousands of dollars. If your system is found to be below standards you get hit with an initial fine of a few thousand dollars and then accrue additional fines daily until you either stop processing credit cards or bring your system up to speed.
I know of at least 2 restaurant chains here in Manhattan that were compromised and had fines over $300,000 each.
While you're googling for an alternate credit card processors, look up "PCI compliancy" and "CISP compliancy" as well. You should also take a look at the links below before deciding on who's going to handle your credit cards.
Pat