Reports.config has invalid schema

The problem comes from a mixure of .NET versions on the server.
The fix is to reset the 1.1 setting for the server and them manually set the aproppriate settings for each virtual directory.
Since the CRM is using ersion 1.1, execute "aspnet_iisreg -r" for 1.1 .NET.
after that, reset the reporting services settings and any other application virtual directory installed.

source of information is here :
http://blogs.msdn.com/mscrmfreak/archive/2006/05/17/599371.aspx
http://gustafwesterlund.blogspot.com/2007/06/reportsconfig-has-invalid-schema.html