Wow this conversation stuff can work!
Last night I posted that MSRS can only be installed on a machine that has a SQL Server licence. This meant that the preferred architecture of the database on one machine and Reporting Services and IIS on another required 2 licences.
I woke up this morning and found that I had a reply. What I had said was not totally accurate.
What it says is that if you want the Report Server on a different machine then that will require a separate licence but you can have the Report Manager on a different machine without a separate licence.
Now the Report Manager is the web UI for the reports and the Report Server is the engine for delivering the reports. I am not sure which half does most of the work and I am sure that you would still need IIS running on the Report Server machine as it delivers its reports using SOAP calls but this could be a useful half way house especially when it comes to integrating the delivery of reports from the same machine that is delivering other content such as MS CRM or Great Plains Portal.
I have edited the original post to point here for the fuller picture.
My extreme thanks to BazarewskyM for such a prompt and full answer.