SQL 2005 - Reporting Services Configuration Error.. Pls Help..

Hi,

I've installed SQL 2005 on a Windows 2003 R2 Server, I also installed another Web Server (Another Windows 2003 R2 Server) on a different machine.
I've installed the Reporting Services on the Web Server.
When I am trying to configure the report server, I successfully created the Virtual Directories, but when trying to do the "Database Setup" step, I am getting an error on the "Create a Grants Rights Script", with this message:

System.UnauthorizedAccessException: Access is denied. (Exception from HRESULT: 0x80070005 (E_ACCESSDENIED))
at System.Runtime.InteropServices.Marshal.ThrowExceptionForHRInternal(Int32 errorCode, IntPtr errorInfo)
at System.Management.ManagementScope.InitializeGuts(Object o)
at System.Management.ManagementScope.Initialize()
at System.Management.ManagementObjectSearcher.Initialize()
at System.Management.ManagementObjectSearcher.Get()
at Microsoft.ReportingServices.Diagnostics.WebUtil.GetIPAddresses(String machine)
at ReportServicesConfigUI.Panels.DatabaseSetupPanel.IsLocalDbServer(String dbServer)
at ReportServicesConfigUI.Panels.DatabaseSetupPanel.SetDatabaseConnectionTask(String connectionString, String server, String database, ConfigurationCredentialsType credsType, String account, String password, Boolean upgrade, String dbVersion)


As a result, I cannot run the reports nor get to the folder.aspx page on the manager side of the application.
I am getting this HTML msg:
The report server installation is not initialized. (rsReportServerNotActivated) (rsRPCError) Get Online Help

When installing the Reporing Server on the SQL Server machine, it works with no problems, and I am doing everything the same.

Would appreciate your help, I've been working on this for few days with no luck.

Thank you!
Yaniv.