ArcMap's Report tool is a real chore to use and is due for an overhaul. I'd like to see:
Templates - Much like the ready-to-use Map Layouts that would pop up when ArcMap loaded up. Have some themes and colors like Microsoft products use in their programs.
Adding Data - The Report Wizard is clunky. At the end it's a big mess with overlapping field names and fields set to miniscule dimensions. See the next point.
GUI Controls - The current GUI controls are primitive and limited. A drag-and-drop style GUI which would allow users to do layout modifications, add Dynamic Text, and drag data fields onto the report from a Catalog-like tree would be handy.
I'm sure there is more to add to this list but I've only used the Report once because it's such a burden.