When you try to install SQL Server 2005 Reporting Services on Windows Vista, the installer apparently fails to recognize that IIS7 is installed (assuming that you have installed it). The error message is misleading and is due to the fact that IIS7 components required by Reporting Services are not installed. IIS7 has been much more componentized than IIS6 and there is a magical list of IIS7 features that must be installed in order for Reporting Services to install successfully. The required IIS7 features are documented in KB article 920201.

Component Folder
Static Content Common HTTP Features
Default Document Common HTTP Features
HTTP Redirection Common HTTP Features
Directory Browsing Common HTTP Features
ASP.Net Application Development
ISAPI Extension Application Development
ISAPI Filters Application Development
Windows Authentication Security
IIS Metabase Management Tools
IIS 6 WMI Management Tools

Once you have SQL Server installed, you will need to install SQL Server 2005 SP2 November 2006 CTP or later as it addresses some Vista-compatibility issues. You can find the latest SQL Server 2005 service pack information here. You should now have a working Reporting Services install on Vista.