Does SQL Server Reporting Services use a lot of server resources? Is it okay to install SSRS on the same server as the SQL Server instance? What should I take into consideration? Is the SQL Server instance performance affected by SSRS say when reports are generated?
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Reporting Services can be demanding in terms of memory and CPU, so it often makes sense to separate it from the database server element of SQL Server - obviously this isn't cheap in terms of licencing. One thing to bear in mind is that the metadata for SSRS is stored in a SQL database, but this can be on a different box. Where SSRS gets the business data from depends on where that data resides - it could be anywhere, but it might be a SQL database somewhere.
If your SSRS deployment uses subscriptions to generate reports out-of-hours, and your SQL database is used for other requirements during business hours, then it might make sense to keep them on one box.
Depending on your SQL edition, and your requirements, you can also treat the separate SSRS boxes like webservers, and have them in a high availability Network Load Balanced cluster - you can't cluster SSRS in the same way that you can with the database engine for high availability.
Like anything, try to test it all in a pre-production or Proof Of Concept environment.