In other words, if I set up SSRS Express edition will I be able to consume and make calls through the webservice?
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Update: Check this link on features supported. Reporting Services in SQL Server Express with Advanced Services.
Your best best is the Express edition with Advanced Services.
SQL Server 2008 Express with Advanced Services has all of the features in SQL Server 2008 Express, plus you can:
Run SQL Server Reporting Services reports on local relational data.