A Competitive Analysis
Discussing licensing is probably one of the hardest topics to get a solid grasp of. Each tool comes with a detailed list of licensing requirements depending upon your situation. The best way to understand it would be to call a sales rep and discuss your needs with them. I'll do my best here to give you a high level overview.
SQL Server Reporting Services, on the surface, appears to have a simpler license model: it's free with the purchase of a SQL Server license. Of course, when you look at it in more detail, things are not so simple. If you want to install SSRS on a standalone server, you must buy an additional license of SQL Server for each computer. The reason this is important is because SSRS is very resource intensive. Rendering reports consumes additional CPU resources and memory and these are the same resources that SQL Server is competing for. Many companies find that it isn't practical to keep SSRS on the same server as SQL Server. On a humorous note, I read a newsgroup post where the person complained that SSRS "eats memory like candy." There is no way to allocate memory between SSRS and SQL Server. This means when processing reports, memory that SQL Server could be using will instead by consumed by SSRS.
There are also security and configuration issues that must be addressed by the database administrator before installing SSRS on the server. Installing SSRS creates additional tables in the database for managing the reports. When installing service packs it modifies table structures and it is recommended that you back up your SQL Server databases. Many DBAs are very protective of their servers and won't let anyone install any additional software on them. Opening the database to additional security risks isn't an option.
Overall, saying that SSRS is free only works when you talk to the marketing department. In fact, it seems that Microsoft has been toning down the "free" aspect of SSRS recently. In interviews with Microsoft product management they are now stating that SSRS is best run on a standalone server with the purchase of an additional SQL Server license. Of course, every company runs different software and has different loads on their server. It's not possible for a simple whitepaper to make recommendations about how your application will perform. Before using SSRS on the same computer as SQL Server in a production environment, you should perform sufficient testing and analysis to insure that SSRS doesn't degrade database performance or expose it to security risks.
Another potential licensing expense is the upgrade to the Enterprise edition of SQL Server. There are two reasons why you would consider upgrading to the Enterprise edition. As mentioned in a previous paragraph, SSRS can consume large amounts of the server's memory. The Standard edition limits you to 2GB of RAM. Depending on how many users are running reports, you might need to expand the server's memory to more than 2 GB. This requires upgrading to SQL Server Enterprise. Secondly, for printing reports that integrate Forms Authentication with existing ASP.NET websites, you must upgrade to the Enterprise edition of SQL Server. Only the Enterprise edition provides a custom API for using Forms Authentication. The SQL Server 2000 Enterprise license costs $20,000. When you take into account that many companies will host SSRS on a standalone server, then you will need a $5,000 license for the Standard edition (SQL Server) and a $20,000 license for Enterprise edition (SSRS). Total license fees are $25,000.
Crystal Reports has a similar product offering as Reporting Services. If you want to build reports that run over the internet as a web service, Crystal Reports for .NET is free and comes with Visual Studio. As a bonus, web delivery is fully compatible with ASP.NET Forms Authentication at no cost. Crystal Reports XI Developer is compatible with Forms Authentication as well.
If you want the additional functionality of centralized report management, scheduled deployments and integrated security then you can upgrade to Crystal Reports Server. The good news for Crystal Reports users is that the licensing model has been greatly simplified with the latest release of Crystal Reports XI. Business Objects has introduced Crystal Reports Server for $7,500 (retail). They also provide unlimited technical support for a year. That's a pretty sweet deal!
The goal is that if a company has to spend a minimum of $5,000 for a Reporting Services license that still requires many programming resources to fill in the missing functionality and it isn't compatible with Forms Authentication, then it isn't much of a jump to spend a little more for a reporting solution that has all the features already built in and it comes with unlimited tech support.