How do you test the reports in cognos 8?

In Cognos 8.3 and only in Report studio you are able to validate/test a report before execution by clicking on th validate icon in the tool bar. Validate may also be found under the tools menu in Report Studio.
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If you want a deeper level of testing, which can be setup in an automated way, I'd suggest taking a look at the MotioCI tool, which supports automated regression testing of Cognos BI Content.

http://www.motio.com/products/ci/overview.do

Using MotioCI you can setup automated test cases which will go off an verify your reports at the desired intervals. These tests can verify things like report performance, expected output, common look and feel rules, etc.

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A third option would also be MotioPI, which is a freeware Cognos utility. It will allow you perform basic validation. MotioPI is no where near advanced as MotioCI but it does make validating many reports at once much easier than using Report Studio.