A "server" is mandatory in the sense that services are required to host SQL Reporting Services. In SQL 2005, you need IIS and a SQL Server Database Engine (SQL 2005, or SQL 2008). In SQL 2008, you still need the database engine, but Reporting Services communicates directly with the http.sys layer (a gross oversimplification of the situation, but basically it means that you don't need to install or run IIS).
Originally Posted by Lepanto
You can run either SQL 2005 or SQL 2008 Reporting Services from a PC (hosting both the web components and the database engine on one machine). It might not be pretty (meaning fast), but it should work fine.
Have you hugged your backup today?