I solved my problem. Mostly it was because I was actually trying to migrate from Active Reports 1.0 to Active Reports .NET 2.0. The steps I used are as follows in case anyone else encounters this issue.
<U>Convert from Active Reports 1.0 (VB6) to Active Reports .NET 2.0</U>
1. First Need to Convert from Active Reports 1.0 (VB6) to Active Reports 2.0 (VB6)
a. Need to install the trial edition of Active Reports 2.0
b. Use the included Upsizer utility to convert the appropriate .dsr file to the upgraded version
c. Open up the .dsr file in Visual Studio 6
d. Use the Active Reports menu to save the .dsr file as an .rpx file
2. Now convert Active Reports 2.0 file to Active Reports .NET 2.0 file
a. Open a Visual Studio 2005 project
b. Create a new report name appropriately
c. Go to the Reports menu and selected Load Layout
d. Navigate to the .rpx file created in step 1d ... and that's it.