@Andres and @Seth: if you are not logged in as Administrator, please do. Also if you are adding Telerik Reports directly to a web site project, be aware that the item template for web site projects is different. Our suggestion is to follow the Solution Structure
help article and add reports to a separate class library.
@Andres: If VS is installed to a different location, then you should respectively change the path from the instructions.
@ISB - the error says it all, you should run the Visual Studio command prompt as administrator or best log-in with Administrator account.
All the best,
the Telerik team