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1) If a user has the Report Library privilege via MRE User Administration, shouldn't that user be able to access Report Library either by clicking on the Library icon in MRE or logging on via the Library logon page?
2) In dserver.ini, what should the values be or USER and PASS? Does this need to be a valid MRE userid and password? Does this have any effect on Report Library, because I'm finding that I can only log on to Library when I use the values specified in dserver.ini.
1) Yes. If you are experiencing problems you should contact Customer Support. You have to be configured with WF Servlet as ReportCaster in 52x is only supported with Servlet, not CGI.
2) When the install creates dserver.ini for the Distribution Server install there is no parameters 'USER' and 'PASS'. There are 'ADMIN' and 'PASS' parameters which is the overall administrator for ReportCaster. This id/pas is not stored in the ReportCaster repository so that there is an id/pass that can administer ReportCaster in the event that the ReportCaster repository is unavailable. This id/pass can use all areas of the ReportCaster/Report Library so this leads me to believe that your overall issue is with creating users in MR with Library privilege and having ReportCaster recognize these users.
The most common issue with this is that the site is configured with CGI and not WF Servlet. Our Product Managers recently found out that the CGI creates users in MR repository when Caster privileges are specified but does not call ReportCaster (since only supports Servlet). Product Management plans on opening up a internal project to make a change to display an appropriate message if configured with CGI.