Its all about getting lucky and using the right words in google. I looked at the report1.rdlc[design] tab and thought of "design view" (In eclipse, its called perspective). Googled - "visual studio rdlc view xml" This link gave it all - http://forums.asp.net/t/1387710.aspx?Report+Viewer+rdlc+files+only+in+design+view+developer+view+
Here are the steps -
Visual Studio > Select the report1.rdlc tab > View > Open With > XML Editor > ok.
Enjoy !