David I like your reply to this issue and I have to say it really did help me.
My issue was that I had backed up and restored my ReportServer databases from a 2005 instance to a 2008R2 instance. I then restored the key which I also backed up.
For some reason I had both the old i.e. 2005 instance and new 2008R2 instance keys, along with a null one, in my Keys table (in all I had 3 entries).
This caused the error
'The feature: "Scale-out deployment" is not supported in this edition of Reporting Services. (rsOperationNotSupported)'
in Report Manager.
By deleting the key for the 2005 instance from the key table, as suggested by David, my problem was resolved.