Original radaronline.com accusations
The original source of this story is radaronline.com. They also provide access to the mentioned police report from 2003[*].
Jackson was charged in 2003 with among other molestation - but not with possession of child pornography - , and acquitted in 2005.
The radaronline.com article mixes up a lot of different things - some of them legal, some of them not; some viewed morally objectionable by most, and some not. It talks about "pornography", "S&M", "twisted porn collection", "drugs to treat sex addiction", "adult and child nudity", "female bondage", "sadomasochism", "transsexuals", "animal torture", and "child torture".
The only times radaronline.com talks about child porn are: "[a] porn collection — which included filthy photos and videos of men, women, boys and girls in perverted positions" (it doesn't mention what perverted positions are, so it's difficult to know if this actually references child porn) and "sexy photos of his own nephews" (which may or may not be considered "porn", depending on what radaronline.com means by "sexy").
[*] Snopes has this to say about the document:
A spokeswoman for the Santa Barbara Sheriff’s Office told the Los
Angeles Times that "some of the documents appear to be copies of
reports that were authored by Sheriff’s Office" but cautioned that the
documents "are interspersed with content that appears to be obtained
off the Internet or through other sources."
The 2003 Police Report
At a first reading, I found no mention of child porn in the police report. It does mention "a book depicting nude children", "three books with photographs of nude and partially clothed children", and "photographs of partially and/or fully unclothed men, women, and children".
Evidence filed in People of the State of California v. Michael Joseph Jackson
The report hosted by radaronline.com also contains a list of evidence introduced in the trial, seemingly based on the police report. The evidence are multiple books, which contain - among other - photos of "children, both boys and girls; some nude", as well as adult nudity and porn.
Rebuttals to radaronline.com accusations
The Washington Times says this:
Authorities familiar with the matter are dismissing a report earlier
this week by Radar Online alleging that the late pop star Michael
Jackson had a cache of child pornography at his Neverland Ranch when
police raided the compound in November 2003.
[...]
Mr. Jackson did
possess “photos of nude children but they weren’t sexually graphic,”
Mr. Zonen, a former Santa Barbara assistant DA, said. “They weren’t
children engaged in sexual activity, and there was no child
pornography. There were no videos involving children. There were
videos that were seized, but they were conventional adult sexually
graphic material. No children involved.”
Conclusion
The police report did not reveal anything that was not already public knowledge. Jackson had adult porn - mainly heterosexual, some homosexual - as well as images of nude children. This was already known at his 2005 trial, where he was not charged with possession of child pornography.