Grrr!  Don't you just hate that error?  And then you have to wait for EVERYTHING (almost) to roll back.

The service (on my test box at least) is referenced at "C:\Program Files\Microsoft SQL Server\MSSQL\Reporting Services\ReportServer\bin\ReportingServicesService.exe". THe file version for the exe is 8.0.743.0, the Assembly Version is 8.0.242.0.

A couple things to try.  First, I'd try reinstalling the beta, uninstalling it, deleting that silly directory, the databases and the virtual directories in IIS, and THEN reinstalling the developer edition.

You may want to try removing the service altogether from the registry (I would advise not).  Or try to use the .NET Configuration Assistant in Administrative tools to repair the ReportingServices exe.  Again, make sure these last two are tried on test box -- there could be unpredictable results.

I haven't tracked down exactly what causes this, so if anyone else has, please add.