For some reason I've been having troubles getting the SharePoint add on for Reporting Services 2008 installed. Seems like the 2005 one was easier, but it's been many months since I've gone through the install so maybe I'm coming down with amnesia J. So anyways, to save myself some sanity, and potentially other would be integrators, here are the steps that worked for me:

Firstly, I was getting this stupid error: "the system administrator has set policies to prevent this installation". To overcome this I had to disable some security policies on the server (and on the other web front ends for that matter):

(NOTE: Make sure to reboot after making these policy changes)

After I did that I stopped getting the "the system administrator has set policies to prevent this installation" error, but the install kept failing and rolling back the changes. ARGG!

This is the next error I was getting:

SQL database login failed. Additional error information from SQL Server is included below.
Login failed for user 'NT AUTHORITY\ANONYMOUS LOGON'.

Well with a bit of conjecture I noticed that I stood a better chance running the MSI through the command window since I could tell it what user to run as. I opened command prompt and executed the following command to switch user accounts to the SharePoint service account: Run "runas /profile /user:[domain]\[user] cmd"

Then I executed the RS Add-on MSI, but in Files only mode: Run "rsSharePoint_x64.msi SKIPCA=1"

This command will open the MSI installer wizard and should successfully complete.

Lastly I browsed to temp directory (do start, run, %temp% and copy the path into command prompt) and ran a second command against an EXE that was just deployed: Run "rsCustomAction.exe /i"

… runs for a few minutes …

Done!

Oh – and Central Administration will now have the Reporting Services configuration pages:

(note: make sure to do this on ALL web front ends)