experienced the same issue with the 401: unauthorized message.
Was unable to resolve issue without restarting the reporting services service.
I have a deployment of XPe with SQL Server 2008 with Advance Services and Reporting Services installed and operating. We have noticed that every so many days (dont know exactly how many) we have to cycle the reporting services service to get the report server to serve up reports. Today we experienced a: Reporting services 2008 http status 401: Unauthorized error after attempting to log in with a successful login name and password. I cycled the service and was able to log in again and pull reports using the same login name and password. We are using the following configuration in the Report Server Configuration windows:
-Service account: Network service
-Webservice url Computername:8080\ReportServer_SQLEXPRESS
-It is installed in Native Mode
Any insight to this would be greatly appreciated as it is plaguing out support department and inadvertantly me since i have to go in and reset the service.