The ReportViewer Control that ships with Visual Studio 2008 can't render SSRS 2008 reports "in local mode" as it has the same report processing engine as SQL Server 2005. Here is the error that I was getting:

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.

Solution:

Host the SSRS reports in SSRS 2008 and change to remote mode or downgrade your reports to 2005.