My preference is to use SQL Server Reporting Services (SSRS) as an application reporting engine where possible - but one of my clients had a requirement to create reports in Crystal Reports. The reports were designed in Visual Studio 2008 and consequently use the Crystal Reports 2008 Basic engine. When you deploy an application onto a server, you will get an error in the event log and an image placeholder where the report should be.
If you want to deploy your app on a server, you'll also need to deploy the CR runtime for your reports to render correctly. The official way to do this (rather than trying to install all the DLLs you can find to the gac) is to use the installer. The easiest way to get this is from your local drive (where you installed visual studio). It is typically located here:
%Program Files%Microsoft SDKs\Windows\v6.0A\Bootstrapper\Packages\CrystalReports10_5