The configuration file contains an element that is not valid. The ReportServerUrl element is not a configuration file element.
I was configuring SSRS 2005 on Windows Server 2008, and on the last stretch (after several errors because of permissions on Windows Server 2008 side) .. I was getting this issue. It seems SSRS does not bode well if the server has more than one website.
What I had to do was to go to the RSWebApplication.config and comment out
<ReportServerUrl>http:/MyDomain/ReportServer</ReportServerUrl>
<!-- <ReportServerVirtualDirectory></ReportServerVirtualDirectory> -->
<ReportBuilderTrustLevel>FullTrust</ReportBuilderTrustLevel>