Can't set reporting services email subscriptions

I am trying to learn SQL Server 2008 Reporting Services and I have a test project with one report. I can’t set up an email subscription since it either complains about “Subscriptions cannot be created because the credentials used to run the report are not stored, or if a linked report, the link is no longer valid” if the data source credentials are set to “Use Windows Authentication” or if I set the source credentials to “Use this user name and password” and put in my user name and password it works in the BI studio but won’t open in IE telling me that “An error occurred during client rendering. An error has occurred during report processing. Cannot create a connection to data source 'DB Name'. Login failed for user 'my user name'.”. What do I need to do to make it (and myself) happy?

Thanks