Can birth defects be diagnosed in utero?

Some. Some problems, like cleft lip, can be see on ultrasound. Others like down's syndrome, can be detect with amniocentesis. No tests or set of tests can find all problems, however.
Sometime. It depends on the defect. There are now many defined genetic diseases and screening can be performed early in pregnancy. If the defect is genetic, it probably be detected in utero.