Once you install the ActivityReports extension it does not appear on any menus.

You can find the ActivityReports here:

http://bestpractical.com/rt/extensions.html

http://search.cpan.org/search?query=RT+ActivityReports

To add it to the Tools -> Reports menu you can

Create/edit this file <rt install>/local/html/Callbacks/ArbitraryName/Tools/Reports/Elements/Tabs/Default

with these contents:

<%init>
   $tabs->{'e'} = {title => 'Activity Reports', path => 'Reports/Activity/index.html'};
</%init>
<%args>
   $tabs => undef
</%args>

-Also add to the Report Index page.

To add it to the Tools -> Reports menu you can

Create/edit this file <rt install>/local/html/Callbacks/ArbitraryName/Tools/Reports/index.html/ListReports

with these contents:

<%init>

$tabs->{'E'} = {
      title => 'Activity Reports',
      path => '/Reports/Activity/index.html',
      description => 'Activity Reports',
};

</%init>
<%args>
   $tabs => undef 
</%args>

In RT4.0, you need to create/edit <rt install>/local/html/Elements/Tabs and around line 125, add the following:

if ( $session{'CurrentUser'}->HasRight( Right => 'AdminUsers', Object => RT->System ) )
    {
      $tools->child( reports => title => loc('Reports'), path     => '/Reports/Activity/',description => loc('Activity Report') );
    }