nimans - wanted to pass along my frustration with this issue too. Hunted around wayyyy too long in menus trying to figure out why I couldn't just add my custom report as a favorite.
Anyway, I came up with a work around, same amount of clicks (possibly even less) as if you actually got the report into Favorites.
Find your custom report in the Memorized Report List (where ever you saved it) and then make sure it's in the main report list (i.e., not in a folder like Accountant or Customers or something) if it's in one of those folders you may have to save a new version into the main list and delete the old one.
Right click your custom report and Edit Memorized Report then make sure the name has an underscore _ before its name. This will shoot it to the top of the list alphabetically (above all the folders and other crap). Then just keep whatever name you need after the underscore.
After that it will be at the top of the dropdown in Memorized Reports. Hope that helps.
