RDL files creation is through SQL 2005->Report Designer and RDLC files creation is through VS 2005->Report Designer also RDL and RDLC formats have the same XML schema but in RDLC files, some values (Query Text) are allowed to be empty, which means that they are not immediately ready to be published to a Report Server. The missing values can be entered by opening the RDLC file using the SQL Server 2005 version of Report Designer....... thats what i think!!!