We passed the same assessment not so long ago. Basically, BIDS and Report Builder 2/3 let you do the same. The report designer is intended for those users who want to create or modify their own reports without installing BIDS. Report Designer has the look of Microsoft Office. It has ribbon controls similar to Excel and Word. The same .RDL or .RDLC is generated by both. However, Report Builder 3 is for SSRS 2008 R2 only. The .RDL format has been changed for SSRS 2008 R2.
In either case, the report can be deployed to SSRS, Sharepoint, or Microsoft Report Viewer (for .RDLC files).
As you may or may not know, there is no BIDS for Visual Studio 2010 (yet). If you want to use BIDS, you will need to use VS 2008, which is designed for SQL Server 2008.
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