KB936219 has been released http://support.microsoft.com/?kbid=936219
This problem occurs if you configure Operations Manager 2007 to use the Local System account as the OpsMgr SDK Service account. In this configuration, the installation queries Active Directory Domain Services (AD DS) for the computer account that is associated with the root management server. In a large Active Directory domain, this query may time out before AD DS returns the queried data.
See the article for more information. This is the issue I documented here http://blogs.technet.com/cliveeastwood/archive/2007/04/12/opsmgr-reporting-may-fail-to-install-in-large-domains-when-the-rms-sdk-service-is-configured-to-run-as-local-system.aspx
(OpsMgr Reporting may fail to install in large domains when the RMS SDK Service is configured to run as Local System)
A hotfix for this is currently in development (has not released as of 5/14/07). Check for future blog posting for status of the hotfix which will be integrated into another fix where OpsMgr reporting will fail to install in a disjointed DNS namespace.
A workaround is currently available as discussed in 936219 by changing the SDK service account from Local system to a domain account using the steps in http://support.microsoft.com/kb/936220