How To Setup User Security For Reporting Services Used Inside ASP.NET Web Applications?

I'm working on a project that requires integration of SQL Server Reporting Services with ASP.NET 3.0 Web Applications.
I'm working on Visual Studio 2005, with SQL Server 2005 on an XP development workstation.
SQL Server, Reporting Services, and IIS are all running on my local machine.

I'm trying to prototype two approaches, one using the Report Viewer control, and the second using the Reporting Services Web Service. I have the two examples setup in projects in Visual Studio.
The sample reports and data sources work fine in Visual Studio. I can access the report using the Reporting Services URL like this: http://localhost/Reports/Pages/Report.aspx?ItemPath=%2fBTT_BDS_DEV%2fCustomers; Report works fine.

My problem is, that when I try and access the report using the Report Viewer inside an ASP.NET page or from the Web Serivce hooked up inside an ASP.NET Page I get a security errors. I have chosen Windows Security for the Datasource, and ASP.NET pages. In the case of the Web Service, I'm passing in my local domain user name as the credentials.

I'm prototyping this on my local workstation, but I need to design this to be used on our corporate Intranet using Windows Security.

My questions are:

1. How do I need to setup users on my local development workstation to get this to work.
2. How should I plan for user security for enterprise deployment, i.e. using Reporting Services inside a large ASP.NET Web Application?
3. Can anybody give me some links to some good developer type working examples of doing this. I've looked but have not found the answers
to the "how do I setup users" part of the question specifcally related to ASP.NET apps?

Below is the code example of the Web Services example app I'm working with which came out of a book I have on
Reporting Services. This example compiles and seems like it would work but doesn't. Also following are a few of the
error messages I get when experimenting with the example apps:

Errors:

1. The permissions granted to user 'LocalMachineNameASPNET' are insufficient for performing this operation. (rsAccessDenied)

2. System.Web.Services.Protocols.SoapException was unhandled by user code
Message="System.Web.Services.Protocols.SoapException: The permissions granted to user 'LocalMachineName\ASPNET' are insufficient for performing this operation. ---> Microsoft.ReportingServices.Diagnostics.Utilities.AccessDeniedException: The permissions granted to user 'WCRBUSCNC2830B\ASPNET' are insufficient for performing this operation.
at Microsoft.ReportingServices.Library.RSService._GetReportParameterDefinitionFromCatalog(CatalogItemContext reportContext, String historyID, Boolean forRendering, Guid& reportID, Int32& executionOption, String& savedParametersXml, ReportSnapshot& compiledDefinition, ReportSnapshot& snapshotData, Guid& linkID, DateTime& historyOrSnapshotDate, Byte[]& secDesc)
at Microsoft.ReportingServices.Library.GetDataForExecutionAction._GetDataForExecution(CatalogItemContext reportContext, ClientRequest session, String historyID, DataSourcePromptCollection& prompts, ExecutionSettingEnum& execSetting, DateTime& snapshotExecutionDate, ReportSnapshot& snapshotData, Int32& pageCount, Boolean& hasDocMap, PageSettings& reportPageSettings)
at Microsoft.ReportingServices.Library.GetDataForExecutionAction.ExecuteStep(CatalogItemContext reportContext, ClientRequest session, DataSourcePromptCollection& prompts, ExecutionSettingEnum& execSetting, DateTime& executionDateTime, ReportSnapshot& snapshotData, Int32& pageCount, Boolean& hasDocMap, PageSettings& reportPageSettings)
at Microsoft.ReportingServices.Library.CreateNewSessionAction.Save()
at Microsoft.ReportingServices.WebServer.ReportExecution2005Impl.LoadReport(String Report, String HistoryID, ExecutionInfo& executionInfo)
--- End of inner exception stack trace ---
at Microsoft.ReportingServices.WebServer.ReportExecution2005Impl.LoadReport(String Report, String HistoryID, ExecutionInfo& executionInfo)
at Microsoft.ReportingServices.WebServer.ReportExecutionService.LoadReport(String Report, String HistoryID, ExecutionInfo& executionInfo)"
Source="System.Web.Services"
Actor="http://localhost/ReportServer/ReportExecution2005.asmx"
Lang=""
Node="http://localhost/ReportServer/ReportExecution2005.asmx"
Role=""
StackTrace:
at System.Web.Services.Protocols.SoapHttpClientProtocol.ReadResponse(SoapClientMessage message, WebResponse response, Stream responseStream, Boolean asyncCall)
at System.Web.Services.Protocols.SoapHttpClientProtocol.Invoke(String methodName, Object[] parameters)
at WebReportTester.localhost.ReportExecutionService.LoadReport(String Report, String HistoryID) in C:Documents and SettingsconbcxMy DocumentsVisual Studio 2005ProjectsBTT_BDS_DEVWebReportTesterWeb ReferenceslocalhostReference.cs:line 242
at WebReportTester._Default.btnExecuteReport_Click(Object sender, EventArgs e) in C:Documents and SettingsconbcxMy DocumentsVisual Studio 2005ProjectsBTT_BDS_DEVWebReportTesterDefault.aspx.cs:line 82
at System.Web.UI.WebControls.Button.OnClick(EventArgs e)
at System.Web.UI.WebControls.Button.RaisePostBackEvent(String eventArgument)
at System.Web.UI.WebControls.Button.System.Web.UI.IPostBackEventHandler.RaisePostBackEvent(String eventArgument)
at System.Web.UI.Page.RaisePostBackEvent(IPostBackEventHandler sourceControl, String eventArgument)
at System.Web.UI.Page.RaisePostBackEvent(NameValueCollection postData)
at System.Web.UI.Page.ProcessRequestMain(Boolean includeStagesBeforeAsyncPoint, Boolean includeStagesAfterAsyncPoint)

Web Service Code Example:

protected void btnExecuteReport_Click(object sender, EventArgs e)
{
byte[] report;

//Create an instance of the Reporting Services Web Reference
localhost.ReportExecutionService rsv = new localhost.ReportExecutionService();

//Create the credentials that will be used when accessing Reporting Services
//This must be a logon that has rights to the Customers Report
rsv.Credentials = System.Net.CredentialCache.DefaultCredentials;
rsv.PreAuthenticate = true;

//The Reporting Services virtual path to the report.
string reportPath = @"/ReportFolder/Customers";

//The rendering format for the report
string reportFormat = "HTML4.0";

//The devInfo string tells the report viewer how to display with the report
StringBuilder deviceInfoBuilder = new StringBuilder();
deviceInfoBuilder.Append(@"<DeviceInfo>");
deviceInfoBuilder.Append(@"<Toolbar>");
deviceInfoBuilder.Append(@"False");
deviceInfoBuilder.Append(@"</Toolbar>");
deviceInfoBuilder.Append(@"<Parameters>");
deviceInfoBuilder.Append(@"False");
deviceInfoBuilder.Append(@"</Parameters>");
deviceInfoBuilder.Append(@"<DocMap>");
deviceInfoBuilder.Append(@"True");
deviceInfoBuilder.Append(@"</DocMap>");
deviceInfoBuilder.Append(@"<Zoom>");
deviceInfoBuilder.Append(@"100");
deviceInfoBuilder.Append(@"</Zoom>");
deviceInfoBuilder.Append(@"</DeviceInfo>");

string deviceInfo = deviceInfoBuilder.ToString();

//Create an array of the values for the report parameters
localhost.ParameterValue[] parameters = new localhost.ParameterValue[1];
localhost.ParameterValue parameterValue = new localhost.ParameterValue();
parameterValue.Name = "@WTRKCustomerCode";
parameterValue.Value = "B34186";
parameters[0] = parameterValue;

//Create variables for the remainder of the parameters
string historyId = string.Empty;
string credentials = string.Empty;
string showHideToggle = string.Empty;
string extension = string.Empty;
string mimeType = string.Empty;
string encoding = string.Empty;
localhost.Warning[] warnings;
localhost.ParameterValue[] reportHistoryParameters;
string[] streamIds;

localhost.ExecutionInfo execInfo = new WebReportTester.localhost.ExecutionInfo();
localhost.ExecutionHeader execHeader = new WebReportTester.localhost.ExecutionHeader();
rsv.ExecutionHeaderValue = execHeader;

execInfo = rsv.LoadReport(reportPath, null);
rsv.SetExecutionParameters(parameters, "en-us");

try
{
//Execute the Report
report = rsv.Render(reportFormat, deviceInfo, out extension, out mimeType, out encoding, out warnings, out streamIds);

//Flush the pending response
Response.Clear();

//Set the HTTP Headers for a PDF response.
HttpContext.Current.Response.ClearHeaders();
HttpContext.Current.Response.ClearContent();
HttpContext.Current.Response.ContentType = "text/html";

//Filename is the default filename displayed
//if the user does a save as.
HttpContext.Current.Response.AppendHeader("Content-Disposition", "Customers.htm");

//Send the byte array containing the report as a binary response.
HttpContext.Current.Response.BinaryWrite(report);
HttpContext.Current.Response.End();

}
catch (Exception ex)
{
if(ex.Message != "Thread was being aborted.")
{
HttpContext.Current.Response.ClearHeaders();
HttpContext.Current.Response.ClearContent();
HttpContext.Current.Response.ContentType = "text/html";

StringBuilder errorMessageBuilder = new StringBuilder();
errorMessageBuilder.Append(@"<HTML>");
errorMessageBuilder.Append(@"<BODY>");
errorMessageBuilder.Append(@"<H1>");
errorMessageBuilder.Append(@"Error");
errorMessageBuilder.Append(@"</H1>");
errorMessageBuilder.Append(@"<BR>");
errorMessageBuilder.Append(@"<BR>");
errorMessageBuilder.Append(ex.Message);
errorMessageBuilder.Append(@"</BODY>");
errorMessageBuilder.Append(@"</HTML>");

string errorMessage = errorMessageBuilder.ToString();

HttpContext.Current.Response.Write(@errorMessage);
HttpContext.Current.Response.End();

}
}

}



Any direction here related to best practices on setting up users for code use with
ASP.NET applications would be greatly appreciated...

Thanks in advance...