I have implemented a report in standard WPF controls and have also implemented a DocumentPaginator to take these controls and convert them into a document for p
IMHO, you've got the right idea: XPS is, in my mind, the simplest method of serializing the data into a usable format, especially for conversion.
As for a third party tool, I've a peer (as in, not myself,)who's used CheckPrixa with some measure of success; it's freeware and it offers command line conversions. (i.e. serializing a document and converting a la generated .bat file.)
It also allows you to handle keywords, titles, etc. along with more important items like even pagination.
As far as I'm aware, there are no known discrepancies.
Alternatively, if converting the MSXPS is what's giving you headaches, you might want to look at XpsConverter, it converts MSXPS to OpenXPS, and as a Window's driver, it's available on any machine using .NET 3 and above.
Keep us updated with whatever solution you try, virtual reports are a growing deal.