SSRS / BIDS 2008 Reports cannot be consumed by report rendering control in SSMS 2008, but only SSRS / BIDS 2005 Reports

I started working on a task to create a report that can be used in SSMS to keep track of SSIS packages and profile them. Jamie Thomson has written a code snippet that I would be using as a starting point for this project. In the course of developing this, I encountered my first barrier which I would like to share.

Develop any regular report using BIDS 2008 and SSRS 2008. If you use the same report for rendering in SSMS 2008 by using the Custom Reports functionality, the report won't get rendered however simple it would be. I got confused with this behaviour, and started investigating this issue over web. The error that I was getting continuously was "The report definition is not valid. Details: The report definition has an invalid target namespace 'http://schemas.microsoft.com/sqlserver/reporting/2008/01/reportdefinition".

After spending quite some time, I was able to find an issue on Connect that this is a bug with SSMS. The bug definition is as follows:

When I try to run a custom report in SSMS created with BIDS 2008 it fails with the following error message:

The report definition is not valid. Details: The report definition has an invalid target namespace 'http://schemas.microsoft.com/sqlserver/reporting/2008/01/reportdefinition' which cannot be upgraded. (Microsoft.ReportViewer.Common)

As of now this bug has no workaround, and the only possible solution is to install BIDS 2005 and even probably SSRS 2005 to develop a report (or if someone has a tool to work with RDL 2005 specifications) side by side to SQL Server 2008. I can't believe, all this to just develop a simple SSRS 2005 report which can be consumed by dumb report control in SSMS 2008.