The answer as always is
It depends
Typically on the amount of data and the number of reports and the commplexity of
those reports
We use the reporting services web parts for sql 2000 ourselves
We point them at reporting services running on another server
That server then runs reports against a myriad of database servers (accounts,
crm, support etc)
Ie the web parts functionality is nothing to do with sharepoint as such it
merely represents the reporting services functionality in the portal if you see
what I mean
So, we provide the reports in the users my site and departmental sites to convey
information like a dashboard to save them from having to go and look for
information
As the report processing is on a separate server the hit on sharepoint is very
low
I know this doesn't really answer your question but hopefully you can see why
the answer is that it depends
For very small implementations you could host the reporting server web site on
your front end web server or on your sql server
If you are going to be generating lots of complex reports then you may want to
host it on a server separate from both of those.
I.e as andrew says, you might want to get sizing recommendations from the
reporting services forum.