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From Microsoft:
Microsoft Dynamics CRM 2011 Report Authoring Extension is required to author custom Fetch-based reports for Microsoft Dynamics CRM by using Business Intelligence Development Studio. Report Authoring Extension is a plug-in that obtains the metadata and data from Microsoft Dynamics CRM.
What do you need to know about free software?
“Microsoft Dynamics CRM Reporting Extensions must be installed on SQL Server Reporting Services for reports to work” in CRM 2011. The Microsoft Dynamics CRM 2011 Reporting Extensions, previously known as the SRS Data Connector, will sometimes return an error message during installation that is.