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Please check the parameter mapping when you use the subreport control while mapping to the report,you need to map all the parameters perfectly or else you will get object instance not set to an instance of an object kind of error.
I have the same pb on our environment and behaviour is different between 2 ssrs reports. Actually, on 2 reports that are not at all in sys layer, one report is ok and the other one is not good (same error than Faisal Fareed).
We posted a ticket to microsoft support but they want a copy of our database to make tests but, because of confidentiality, we are not able to go this way.
try to check clients kernel version. You may get this error when you have version mismatch.
Hope it helps.
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