I have finally fixed this problem.

The "privilege required by the client" turned out to be "Act as part of operating system" for the ASPNET user (under which the RS web...

Andreas thanks for sticking with me but there is no database master key.  I haven't created one and apparently the Reporting Services installation doesn't create one.  I did try anyway...

Thanks for the suggestion Andreas.

Since at present there is nothing else on the new server I completely regenerated the service master key which should I think have performed what you...

Thanks very much for responding but the link you quote is to the very page where MS say "the /3GB switch should not be used on Windows 2000 Server because...

Many thanks for reply, it  was indeed to do with domain  login.  Thanks for taking the time.