[reporting-services] When to use RDLC over RDL reports?

Some of these points have been addressed above, but here's my 2-cents for VS2008 environment.

RDL (Remote reports): Much better development experience, more flexibility if you need to use some advanced features like scheduling, ad-hoc reporting, etc...

RDLC (Local reports): Better control over the data before sending it to the report (easier to validate or manipulate the data prior to sending it to the report). Much easier deployment, no need for an instance of Reporting Services.

One HUGE caveat with local reports is a known memory leak that can severely affect performance if your clients will be running numerous large reports. This is supposed to be addressed with the new VS2010 version of the report viewer.

In my case, since we have an instance of Reporting Services available, I develop new reports as RDLs and then convert them to local reports (which is easy) and deploy them as local reports.