Yes, that works, I am using the WindowsFormsHost in a wpf project to wrap the ReportViewer.
In the ViewModel I am creating the WindowsFormsHost and the ReportViewer:
WindowsFormsHost windowsFormsHost = new WindowsFormsHost();
reportViewer = new ReportViewer();
windowsFormsHost.Child = reportViewer;
this.Viewer = windowsFormsHost
and in the View I am using a ContentPresenter to display it, by binding to the Property that holds the WindowsFormsHost.
<ContentPresenter Content="{Binding Viewer}" ...
We’re using the Business Intelligence Studio (which is an Visual Studio 2008 with templates for editing reports) for report creation. http://msdn.microsoft.com/en-us/library/ms173767.aspx
Take care,
Martin