Ah, there's your problem.
Replace() is more like an 'expression' function than a normal function. What you're trying to do is use it like a normal function, so you're expecting
Replace ("String", "S", "s")
to somehow make "String" into "string"... But it doesn't know what to do with that. Instead, you should use something like
variable = Replace ("String", "S", "s")
which will result in a variable with the string 'string'. Does that make sense?
NOTE: You can also use them inside messages, as well as a few other things, like this:
msg (Replace("String", "S", "s"))
// This will print 'string'