Error when loading excel sheet using excel services

Problem statement
Was messing around with lists and decided to create a Report Library (Site Settings > Create > Report Library), to get an idea of what it can offer. So, i created the library and then decided to create a new Report. However, I got an error when trying to view the report (which was a .xlsx file). It was something like:
"You do not have permissions to open this file on Excel Services.Make sure that the file is in an Excel Services trusted location and that you have access to the file."

Solution

Add the Report Library a trusted file location

1. Open the Sharepoint Central Administration Web application
2. On the Central Administration home page, click Application Management
3. On the Application Management page, in the Office Sharepoint Server 2007 Shared Services section, click Create or Configure this Farm’s Shared Services
4. On the Manage this Farm’s Shared Services page, click SharedServices1 (Default)
5. On the Shared Services home page, in the Excel Services Settings section, click Trusted file location
6. On the Excel Services Trusted File Locations page, click Add Trusted File Location
7. In the Address section, type the location and name of the SharePoint Office SharePoint Server 2007 document library that you want to add as a trusted file location in Excel Services. If the document library is stored in the Microsoft Windows SharePoint Services 3.0 content database, ensure that Windows SharePoint Services 3.0 is selected as the Location Type.
8. In the External Data section, select the type of data connections that you will allow workbooks in this trusted file location to contain and click OK.
   

References:
http://technet2.microsoft.com/Office/en-us/library/00fc7447-6c0c-435c-840f-b1033710fe561033.mspx?mfr=true