This issue has been tying me in knots. I am moving away from SQL authentication as CAC is the preferred method in the federal govt for accessing computers and servers. I also don't want to use no credentials. thats just nonsense. Unfortunately, I'm going to require users to use their network login barring my being directed to use a SQL account, not use credentialing which I'm loathe to do or Kerberos v5 is used. Therefore, users will have to enter their credentials until a better way is found. wish there was a workaround!
Windows Integrated Security
When you use the Windows Integrated Security option, the report server passes the security token of the user accessing the report to the server hosting the external data source. In this case, the user is not prompted to type a user name or password.
This approach is recommended if Kerberos is enabled. If Kerberos is not enabled, you should only use this approach if all the servers that you want to access are located on the same computer.