Updaing SQL 2005 Report Builder Reports (based on Report Models) to SQL 2012 Report Builder Reports?

Question

We are upgrading from SQL 2005 to SQL 2012 directly (no SQL 2008 to be installed).  We have many SSRS Reports written in Report Builder 1.0 against Report Models generated from an OLAP datasource.  In SQL 2012, Report Models can no longer
be created or edited.  I have found many posts on this topic, including this: 
http://social.msdn.microsoft.com/Forums/en-US/896522da-45c3-46c0-848a-16f8f02ab051/how-to-upgrade-report-models-from-report-builder-1020-to-30. which the 'answered' response states: 
SQL Server 2012 Reporting Services does not include tools for creating or updating report models. Although you can continue
to use existing report models as data sources in SQL Server 2012 Reporting Services reports you should consider updating your reports to remove their dependency on report models.
But I cannot locate any instructions/documentation, etc. on how to go about "updating your reports to remove
their dependency on report models.".  How do I take existing Report Builder 1.0 reports that point to Report Models and upgrade them to the new SQL 2012 without Report Models?  Is there a way to convert them?  Or, do they need to be rewritten
from scratch?  If there is a link to these instructions, please post as I cannot locate it any where.  Thank you.

Answer 1

Katherine thank you for helping with this.  Here is what I have tried:
On the Report Manager (2012) site, I created a new OLAP data source.  And when I test the connection, I get the pop up "Connection created successfully."
I then pointed my Report Builder (v1.0) report to this new Data Source (from Report Manager site, selected 'Manage' for the report, from Data Sources, selected Browse and drilled down to the new Data Source I created and selected Apply). 
Now when I try to View the report, I receive the following error:
An error has occurred during report processing. (rsProcessingAborted) Query execution failed for dataset 'paramDataSet'. (rsErrorExecutingCommand) The SemanticQuery element at line 7, column 279 (namespace http://schemas.microsoft.com/sqlserver/2004/10/semanticmodeling)
cannot appear under Envelope/Body/Execute/Command.
I then exited IE and reopened the Report Manager site.  I opened Report Builder 3.0,, selected Open and opened this same report.  Idrilled donw to Data Sources and  right clicked on dataSource1 (the only one listed) and selected Data
Source Properties.  I kept the same name, but selected the new shared datasource I created (New DataSource), and selected OK.
Next, I drilled down to Datasets.  There are two listed, dataSet and paramDataSet (yes, this report has parameters).  I right clicked on the dataSet and selected dataSet properties, and see that it points to dataSource1 (which is the dataSource
I just pointed to my New DataSource).  I cancelled and checked the Data Source for paramDataSet, and it also points to dataSource1.  Selected cancel and went back to the main dataSet.
So both datasets point to the new DataSource I created.
If I select Run, I get the following error: 
I select OK and right click on dataSet and select Refresh Fields and get this error:
Can you (anyone) please explain what I am doing incorrectly?  Thank you.