I think I have a bettter solution. Note this is a bug with the Microsoft Data Set Designer and not Telerik Reporting.
Apparently the DS Designer has an issue with reading the Metadata if you use temp table in your stored proc e.g. #temptablename resutling in the graphical user interface for adding a Table Adapter using a stored procedure becoming un-usable and forcing you to use a hand coded work around as Susan noted above or re-write your entire stored proc. Not sure about you, but I use these tools to reduce my work not increase it. The idea of hand coding my data set connections AND my report takes the fun out of my day.
I found this little trick that will get the Data Set Designer to read your metadata from your stored proc and allow you to use the Graphical Designers rather than hand coding everything.
Add this in the beginning section of your stored proc, you may have to remove the tableadapter from the design surface after you add this for it to show. I added mine right after my AS statement and before my declaration and temptable definitions.
IF 1=0 BEGIN
SET FMTONLY OFF
Since the condition of 1=0 will never execute no worries on actually setting FMTONLY to OFF.
Bizarre, but the designer surface will now recognize your metadata and allow you to use them via the graphical interface of T-Reporting just as it should. Apparently this little feature has been around since for quite some time and must fall low on Microsoft's list of things to fix.
I found the details for this fix in this thread on Microsoft
Hope this helps others... Happy Reporting