Reason & Solution
When a CR[Crystal Report] is being created in ASP.NET, the .NET will create a report file in a temp folder, e.g. C:\Documents and Settings\MachineName\ASPNET\Local Settings\Temp.
#1 You can try to give ASPNET permission for this folder.
#2 You can also update web.config to impersonate.
<authentication mode="Windows">
<identity impersonate="true"
userName="mydomainname\myusername"
password="mypassword" />
I preferred the #1 solution ,as it is easier to give permissions once on the folder; You may like to try option #2 but keep a note that whenever Domain[very rare],user or password changes at that point web.config needs to be updated.
Hope it helps