Could not connect to the report server

I have installed SQL Server 2008 R2 Developer and am trying to deploy reports tohttp://localhost/ReportServer but am getting the following error msg. Anu ideas?:

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Could not connect to the report server http://localhost/ReportServer. Verify that the TargetServerURL is valid and that you have the correct permissions to connect to the report server. (Microsoft SQL Server Report Designer)
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The request failed with HTTP status 405: Method not allowed. (Microsoft.ReportingServices.Designer)
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Program Location:
   at Microsoft.SqlServer.ReportingServices2010.RSConnection2010.SetConnectionProtocol()
   at Microsoft.SqlServer.ReportingServices2010.RSConnection2010.SoapMethodWrapper`1.ExecuteMethod(Boolean setConnectionProtocol)
   at Microsoft.SqlServer.ReportingServices2010.RSConnection2010.ListItemTypes()
   at ReportServiceClient2010.CheckAuthenticated()
   at Microsoft.ReportDesigner.Project.ReportClientManager.DetectEndpointAndAuthenticate(String url, ICredentials credentials, String& authCookieName, Cookie& authCookie, EndpointType& endpointType)
   at Microsoft.ReportDesigner.Project.ReportClientManager.DetectEndpointAndAuthenticate(String url, ConnectionProperties& connectionProperties)
   at Microsoft.ReportDesigner.Project.ReportClientManager.GetCredentials(String url, CancelFlag cancelFlag)
   at Microsoft.ReportDesigner.Project.ReportProjectDeployer.PrepareDeploy()