Error message when you use one application pool to run the Report Server Web service and another application pool to run Report Manager: "The report server has encountered a configuration error"

Consider the following scenario. You use one application pool to run the Report Server Web service in Microsoft SQL Server 2005 Reporting Services. You use another application pool that uses a different identity to run Report Manager. You may not be able to access the Report Server Web service, and you may receive the following error message:

This problem occurs because the Report Server Web service and Report Manager share the same security group. When a change is made to one of the services, the changed account is removed from the security group. The other service is affected by the change, and you may receive the error message.

To work around this problem, use either of the following methods:

• Set the Report Server Web service and Report Manager to use the same application pool.
• Add the security account to the SQLServer2005ReportingServicesWebServiceUser$InstanceName group that you use for the application pool identity.

Microsoft has confirmed that this is a problem in the Microsoft products that are listed in the "Applies to" section.

Steps to reproduce this problem

1. In Report Server Configuration Manager, click Web Service Identity, and then click New.
2. In the Application Pool Name box, enter AppPool#1, select Local Service for the Built-in Account option, and then click OK.
3. In Report Server Configuration Manager, click Web Service Identity, and then click New.
4. In the Application Pool Name box, enter AppPool#2, select Network Service for the Built-in Account option, and then click OK.

When you try to access the Report Server Web service by using http://ServerName/reportserver in Microsoft Internet Explorer, you receive the error message that is mentioned in the "Symptoms" section.