In native mode SSRS has it's own ReportServer web application. Report .rdl files are uploaded to this. Permissions for access to reports are managed seperately through this. Data connections and other configuration items are stored here too. To view reports
in via SharePoint, there are web parts that can display a report from the SSRS web app, but users have to have both rights to the SharePoint page and rights on the SSRS web app.
In integrated mode, the rdl files are uploaded to a SharePoint document library and are managed via SharePoint. Permissions are handled the same way as standard SharePoint libraries/files and configuration is done via SharePoint interfaces. Reports can be
viewed by opening the rdl files through SharePoint or via web parts.
As far as I know there's no significant performance difference between the two methods. The choice between them is really about how you want to manage access, you may want or not want a seperate layer of access control to reports, and you may or may not
want reports to be vieweable outside of SharePoint etc.
