A report layout can be based on either a Word document or RDLC file. Deciding on whether to use a Word report layout or RDLC report layout type will depend on how you want the generated report to look and your knowledge of Word and SQL Server Report Builder.
The general design concepts for Word and RDLC layouts are very similar. However each type has certain design features that affect how the generated report is appears in the Microsoft Dynamics NAV client. This means that the same report might look different when using the Word report layout compared to the RDLC report layout.
The process for setting up Word report layouts and RDLC report layouts on reports is the same. The main difference is in the way you modify the layouts. Word report layouts are typically easier to create and modify than RDLC report layouts because you can use Word. RDLC report layouts are modified by using SQL Server Report builder which targets more advanced users.