Had multiple folks ask this question and there does not seem to be targeted docs as yet in this regard, hence decided to blog on this. Hope you find it helpful.

• If you need to in-place Upgrade to SharePoint 2010 then here are the recommended sequence of steps to take with  
  Starting state: SharePoint 2007, SQL Server 2008 Add-in and SQL Server 2008 Report Server
  
  1. Run SSRS 2008 SP1 CU8 (or higher) installer on all SSRS in SharePoint mode machines, details and download of SP1 CU8 @  http://support.microsoft.com/kb/981052
  2. Run the SharePoint 2010 pre-requisite installer on all SharePoint 2007 WFEs. This should install SSRS 2008 R2 Add-in for SharePoint 2010 which should perform an in-place upgrade from the previous Add-in,
  3. Run SharePoint 2010 setup on all SharePoint 2007 WFEs and Report Server machine(s).

   Ending state: SharePoint 2010, SSRS 2008 R2 Add-in, SSRS 2008 Sp1 + CU#8 Report Server

• If you need to in-place Upgrade to SharePoint 2010 and SSRS 2008 R2 Report Server then here are the recommended sequence of steps to take with
  Starting state(s): SharePoint 2007, SQL Server 2008 Add-in and SQL Server 2008 Report Server   
  1. Run SSRS 2008 R2 setup on existing SSRS Report Server instances. This should perform an in-place upgrade of the existing report server instance to SSRS 2008 R2.
  2. Run the SharePoint 2010 pre-requisite installer on all SharePoint 2007 WFEs. This should install SSRS 2008 R2 Add-in for SharePoint 2010 which should perform an in-place upgrade from the previous Add-in,
  3. Run SharePoint 2010 setup on all SharePoint 2007 WFEs and Report Server machine(s). 

   Ending state: SharePoint 2010, SSRS 2008 R2 Add-in, SSRS 2008 R2 Report Server

For SQL Server 2005 SP2 / SP3 report server in SharePoint mode versions, step 1 (from above scenarios) comprises upgrading to SSRS 2008 SP1 + CU8 OR SSRS 2008 R2 followed by steps 2 and 3( from above scenarios) when upgrading to SharePoint 2010.