We have installed SQL Server 2008 R2 Standard Edition on a virtual server (C-SQL) and SharePoint Server 2010 on another virtual server (C-SPOINT),
with the SQL Backend of the SharePoint database residing on C-SQL. This worked fine.
SQL Server was installed with the domain administrator account and SharePoint with an account called 'visi' that has domain administrator privileges.
SSRS on C-SQL was initially installed as a native database. I changed this to a SharePoint integrated database with all authentications done as
the visi user. Report server url was set to the normal http://C-SQL:80/ReportServer/.
On the SharePoint central administration site under General Application Settings -> Reporting Services Integration I filled in the details as