The reporting services can consume the data in two ways; report-specific data sources & shared data sources. Even though they have a similar composition the difference lies in the way they store and manage the data.
Report-specific data source
As the name indicates the data connection would only be used by that specific report. So for obvious reasons, the connection information is embedded in the report definition itself. No other report can use this data source connection for consuming the data. The connection information can be clearly seen in the (XML) report definition and is configured in the data source property page of the report.
Share data source
They are stand alone items and are mostly used for the adhoc reporting while creating the report models. They are also used in the data-driven subscription. Apart from being shared across reports and subscriptions they can also be secured in terms of availability. As far as the editing of the connection information goes, they are very convenient as the change has to be done in only one place.
They are best used in the following situations…
In dev\test environments.
In production environment when the report consume the data from the same data source.
In data-driven subscriptions