As with any production environment, the next exercise (after configuring SSRS in SharePoint Integrated mode using NTLM) was to get it configured using Kerberos.
Listed below are the steps required to accomplish SSRS configured for SharePoint integration mode to use Kerberos authentication.
Note: These instructions are specific to enabling Kerberos for SSRS integration only. It is assumed that Kerberos is already enabled for SharePoint farm. Also it is assumed that SSRS has SharePoint installed configured as a WFE. On exact steps to configuring Reporting Services for SharePoint integration please review http://technet.microsoft.com/en-us/library/bb326356.aspx link.
Server Farm Configuration used
Listed below are the steps taken to accomplished enabling SSRS for Kerberos authentication.
setspn.exe –A HTTP/FQDN_of_SSRS_Server domain\RS_Service_Login
setspn.exe –A HTTP/NetBios_Name_of_SSRS_Server domain\RS_Service_Login
In addition to setting the SPNs for each of your service accounts, you also need to trust each of the computer accounts and some of the service accounts for delegation. Trusting for delegation means that the accounts are allowed to delegate on a user's behalf.
In order to trust for delegation you need to open Active Directory Users and Computers as a user with domain administration rights and follow these instructions
Note: once you implement Kerberos everyone looking at the reports has to be on the same or trusted domain'ed machine and no one will be able to switch users using the log in as function and still view reports. If this is the case then SSRS will give 401 in both cases.
For getting SSRS to work in NTLM, review below blog post on how to avoid using Kerberos with a multi machine setup of ssrs http://blogs.msdn.com/feldman/archive/2007/11/18/quick-guide-on-how-to-install-reporting-services-on-its-own-server-cluster-in-sharepoint-integration-mode-without-using-kerberos.aspx