This error should only occur after a new install of Report Server. If this error occured after upgrading Report Server please call technical support and do not continue with the instructions below.
The problem is caused by a blank tblFolders.adt file. In order to the correct the problem:
1) Download the zipped file located at http://www.rfmdl.com/tblfolder.zip
2) Unzip the downloaded file and copy the contents into the ReportDefs folder that is located within the Medisoft root data directory. It will ask if you want to replace the existing files, choose "Yes".