Neither -- and I haven't quite figured out what it does represent. The values I see in my (relatively empty) Inv_Software_Product_State table are all 1's and 2's for IsManaged.
You want to look at the Inv_Software_Component_State table. Here's an example query that uses the GUID of a random component I selected. This one just isolated it so I could see IsManaged was 0, then managed it and re-ran the query and IsManaged was 1.
Your query for your report would join to Inv_Software_Component_State and the WHERE clause would be something like WHERE Inv_Software_Component_State.IsManaged=1
Does this help?
SELECT vi.Name, s.*
FROM vItem vi
JOIN Inv_Software_Component_State s on vi.Guid=s._ResourceGuid
WHERE vi.Guid='f87ed608-7758-4e0d-87f8-643e9fc47bb0'