I would say that the Report Designer (Visual Studio) targets Developers that have a Visual Studio edition, whereas Report Builder targets non-developer users, familiar with Office applications that will just need to let ClickOnce install Report Builder (but developers can use it too).
Report Builder has less features, but you can still do plenty of things with it, so it can be useful when you need to do a quick fix of the report, and you would take more time to do it with Report Designer.
Having said that, the following scenario is completely valid:
- Create a report in the Report Designer
- Deploy the report
- Do a fix with Report Builder
- Save the report (= deploys the report)
Here are the official descriptions of each environments:
Report Designer
Report Designer in Business Intelligence Development Studio is a
report authoring environment that is hosted in Microsoft Visual
Studio. Use Report Designer project and solution files to organize and
maintain a master copy of report definitions, report parts, shared
data sources, shared datasets, and resource files such as images and
ESRI shapefiles for maps.
Report Builder
Report Builder is a report authoring environment for business users
who prefer to work in the Microsoft Office environment. You work with
one report at a time. You can modify a published report directly from
a report server. You can quickly build a report by adding items from
the Report Part Gallery provided by report designers from your
organization.
More info on the differences between Report Designer and Report Builder: