I had the same problem when I installed CR 8.5. The file crviewer.dll was conflicting with IE. I did not find any fixes to it but I renamed the crviewer.dll in the Program Files/Crystal Reports directory and it worked.
I have the same problem. I tried passing the parameters from the main report to the subreport, but when I open the webpage it still prompts me for the username and password for the subreport.
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