How to Integrate VMM 2008 R2 into SCOM 2007 R2

• Ensure Virtual Machine Manager service is running as svc-vmm or domain account other than Local System
• VMM Agent can be running Local System
• Add svc-vmm (or other domain account running the VMM service) to the Local Admins on the SCOM RMS
• Remove previous VMM 2008 MPs from SCOM before importing VMM 2008 R2 MPs
• VMM 2008 R2 MP is located with the VMM media ONLY - this tripped me up for a solid 5 minutes
• Open VMM logged in as svc-vmm (or other domain account running the VMM service) and launch SCVMM console - if prompted for credentials or server, click OK
• Navigate to Administration > System Center and double-click Operations Manager Server - type the FQDN of the OpsMgr RMS
• Navigate to Administration > System Center and double-click Operations Manager Reporting URL - type the FQDN of where SSRS is installed for SCOM Reporting with a /ReportServer at the end - example http://SCOMRPT01/ReportServer

Not too difficult, but as per everything Microsoft if your permissions aren't correct, or you haven't removed all previous VMM MPs from SCOM - you'll get cryptic errors.  Enjoy!

This is also a helpful document: http://technet.microsoft.com/en-us/library/ee236428.aspx