Hello metsie,For a Web Site project all code files should reside in the App_Code folder - otherwise they will be treated just as ordinary files and will not get compiled. Once you put your report code file in the App_Code folder, Microsoft Visual Studio will respects its designer and you'll have the View Designer option enabled.
The other solution is to use the good old Web Application project (in order to have the Web Application project in VS2005 you should install Visual Studio Service Pack 1).
If you want to keep some Report files inside the Web Site
project but outside App_Code
folder just drag these files into App_Code
folder any time you want to use Telerik's Reporting Designer
to design them.
the Telerik team