I am looking for good embedded database that i can use for application developed using Qt. The applications target desktop users from various sites of a single large company. The database should be able to store data separately at each site and the data shall be merged with other sites as and when it is required.
Besides SQLite, any of the following will work with Qt as an embedded database. Qt already has drivers for most of them, and you can find drivers for others. In terms of merging data "with other sites", it all depends on what you mean by this. Replication solutions for SQLite and MySQL Embedded may not be great (or exist at all). I would probably go with Firebird or Berkley.
If interested you can find more information on various replication support at the following links: