SQL 2008 and SQL 2005 use different RDL namespaces and so they pretty much aren’t compatible. You can edit SQL 2005 Reports using the SQL 2008 editor, but new reports won’t be able to be deployed to the SQL 2005 report server.
With enough major editing of the SQL 2008 report you can convert it to a SQL 2005 report.
In a future post (you can read this as, as soon as I figure out just what editing needs to be done) I’ll cover what editing needs to be done to the SQL 2008 RDL to make it run within a SQL 2005 Report server.
This is going to come in handy as you can’t have SQL 2005’s UI and SQL 2008’s UI installed on the same machine.