This is an issue that has been around for a while – the different versions of the SQL components between the SSRS add-in for SharePoint and the Analysis Services requirements for cube building caused a catch-22. Thanks to Bart for finding a resolution to this – install the Management Objects Collection component of the SQL 2005 SP3 CU5 patch (KB 972511).
Some more words to describe the problem and help Bing find this resolution for you:
– When you install Reporting Services 2008 in SharePoint integration mode and you install the rsSharePoint.exe component on the application server, then the OLAP generation fails because of the Management Objects Collection 2005 that is of the wrong version.
– You cannot install the Management Objects Collection 2005 from the December 2008 feature pack (error: a higher version is already installed)
– You cannot un-install the “higher version” because it is integral part of the rsSharePoint.exe package
The issue is described in KB 972694
Hope this helps resolve this long running issue.