Here's teh code with the errors fixed (I hope)

#include <stdio.h>
#include <string.h>
#include <stdlib.h>

#define MAX_LEN 80

int reperror, x;
FILE *fn1, *fn2, *fn3;
char buf1[MAX_LEN];
char buf2[MAX_LEN];

int main(int argc, char *argv[])
{

/*
-------------------------------------------------------------------------
Check to see that 3 command arguments were entered along with the program
executable file.
-------------------------------------------------------------------------
*/

reperror = 0;

if (argc == 3)
{
printf(" You Entered a correct amount of information");

if((fn1 = fopen(argv[1] ,"r")) == NULL)
{
printf("There was an error with File 1");
reperror++;
}
else
{
printf("File 1 Checked out okay");
}

if((fn2 = fopen(argv[2] ,"r")) == NULL)
{
printf("There was an error with File 2");
reperror++;
}
else
printf("File 2 Checked out okay");

if((fn3 = fopen(argv[2] ,"r+")) == NULL)
{
printf("There was an error with File 3");
reperror++;
}
else
printf("File 3 Checked out okay");


/* If there has been any errors the program terminates*/
if (reperror > 0)
{
printf(" Sorry There was a problem with opening the files, please check/n ");
printf(" Filenames using error messages above!!! ");
prinft(" program terminated/n ");
exit(1);
}
else
printf("All the files check out okay, program will continue..../n");

}
else
{
printf("There was and error, you did not enter enough/n");
printf("Filenames from command prompt please check and/n");
printf("correct/n");
exit(1);
}

/*
-------------------------------------------------------------------------
This is the actual program, the previous part of the program checked teh files
for errors and the files are still open.
-------------------------------------------------------------------------
*/

do
{
// Gets a line of text from each txt file usally upto end of line char
// or reaches the buffer
fgets( buf1, MAX_LEN, fn1 );
fgets( buf2, MAX_LEN, fn2 );

x = strcmp(buf1, buf2);
// x = < 0 Str1 is less then str2
// x = 0 Str1 is equal to str2
// x = > 0 Str is greater than str2
// if x not = 0 then display and write lines to text file 3
if ( x != 0)
{
printf("File 1: Line n :%s \n",buf1);
printf("File 2: Line n: %s \n",buf2);
fprintf(fn3, "%s \n %s \n", buf1, buf2 );
}
} while ( !feof(fn1) || !feof(fn2))
// While file 1 or file 2 is not EOF


// With the files check print whats in the text file 3
if ( fn3 == NULL )
printf("The File was empty!!!");
else
printf("%s", fn3); // Print contents of txtfile 3 to screen

fclose(fn1);
fclose(fn2);
fclose(fn3);
return (0);
}

To me it seems as though it will work, but its the first time i've done this sort of prog of this sort of scope.
-ali