First, make sure your report server version is SSRS 2008 R2 because Report Builder 3.0 is only supported by SQL Server 2008 R2.
The error message may occur if the target report server URL is not correct when using Report Builder 3.0 to connect to the report server. The report server URL should be the SharePoint site that hosts the target Document Library, for example, http://<Server
Make sure the report server is running in SharePoint integrated mode. To do this, open the Reporting Services Configuration Manager, and check the Report Server Mode option on the Database tab.
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