Michael,
The error is caused by the web service identity account not having read
write (modify) permissions to the temp directory that is used by the
reporting service. For example, grant network service modify permissions to
c:\windows\temp
> Anyone experience this? I just installed the component Integration Services
> and re-applied SP2. Still have the same error when I access
> http://<servername>/reports unless I add the 'Everyone' group to
> C:\Windows\Temp with full access.