Remote report server database was detected
Upgrade Advisor detected that the Database Engine instance that hosts the report server database is on a remote computer or in a different instance on the same computer. This issue blocks the upgrade process only when this report server database Database Engine instance uses one of the following versions of SQL Server:
SQL Server 2000
SQL Server 2005 in a compatibility mode for previous versions of SQL Server
Setup can upgrade a SQL Server 2000 Reporting Services instance that uses a SQL Server 2000 Database Engine in the same instance. However, upgrade is blocked if the report server database is in a different instance, on a remote instance, or runs on a remote SQL Server 2005 instance in SQL Server 2000 compatibility mode.
Choose either approach to continue with the upgrade:
Upgrade the Database Engine instance on the remote computer before upgrading Reporting Services. The server cannot be in SQL Server 2000 compatibility mode after upgrade.
Move the reportserver and reportservertempdb to a SQL Server 2005 or SQL Server 2008 Database Engine instance, and then use the Reporting Services Configuration tool to connect the report server to the database.