Came accross this problem and have solved it

In the RSWebApplication.config file in the ReportManager folder for your SQL 2005 Reporting Services instance.

If you 2005 instance is called SQL2005 you will  have the block of XML:

 <UI>

  <ReportServerUrl></ReportServerUrl>

  <ReportServerVirtualDirectory>ReportServer$SQL2005</ReportServerVirtualDirectory>

  <ReportBuilderTrustLevel>FullTrust</ReportBuilderTrustLevel>

 </UI>

If you change this to:

 <UI>

  <ReportServerUrl>http://<Servername>/ReportServer$SQL2005</ReportServerUrl&gt;

  <ReportServerVirtualDirectory></ReportServerVirtualDirectory>

  <ReportBuilderTrustLevel>FullTrust</ReportBuilderTrustLevel>

 </UI>

All worked for me.

Tim