After several weeks of frustration I finally got Report Manager to work with Vista. I guess it was too much to expect of Microsoft to actually have their own software install correctly on their own OS. For anyone else having problems this is what I had to do:
1) In Configure Report Server|Web Service Idenity - add both Server & Manager to the Classic .Net AppPool.
2) Even though I am the only user account on the computer I'm developing on and log in as administrator, that, apparently isn't good enough for Vista. (Apparently in the world of Vista NOONE is an adminstrator with full rights - great big atta boy to MS). I had to go to the control panel and add my user account and the admin account (for good measure) to the IIS user grooup.
3) Go to add/remove programs and install EVERY IIS option; again, Microsoft won't do it for you.
4) Turn off that silly user control dohicki that Apple makes fun of in their commercials (Earth to Microsoft - that thingie IS rather stupid; how about finding a way to stop hackers without crippling your OS?)
End result: I can now use Report Manager on Vista Ultimate 64bit/SQL Svr 64bit with only a few minor glitches thanks to some clues I picked up in this forum and some hair pulling sluthing.
Source: SSRS and Vista - MSDN Forums