Does BIRT create a file on the file system, like a PDF or Tiff file or does it return a stream?
The report engine produces a variety of content (SVG, PNG, JPG, PDF etc.) and it can either create it as a file or stream this content to the client.
Birt Produce .rptdesign file how can i show it in my jsp
The BIRT designer produces .rptdesign files. The BIRT report Engine produces content as described above.
BIRT supplies a web application to render report content (see the documentation). This applcation has a servlet to respond to requests for reports which streams the content back to the client (in whatever format your report specified).
If you don't want to use the report viewer application as is you need to write your own code to access the API directly.