A colleague had an issue today with a report build in SSRS 2008. He was using multivalued cascading parameters, and noticed that the 3rd parameter would not refresh properly after changing the parent parameters.
This turns out to be a known problem which has been fixed in SQL 2008 SP1 Cumulative Update 3. Installing the CU that goes with kb/970058/ fixed the problem. According to the KB articles below, this could be a problem on SQL 2005 also.
FIX: Error message when you create a SharePoint subscription on a SQL Server 2008 Reporting Services report that uses cascading parameters: “This report requires a default or user-defined value for the report parameter ‘<Parameter>'”
FIX: Error message when you open a report by specifying a multivalued parameter in a URL in SQL Server 2005 or SQL Server 2008 Reporting Services: “Default value or value provided for the report parameter ‘<Parameter>’ is not a valid value”.