First I added these two lines in the top of my python file

import io # used to output a file with exported data

import base64 # used to encode the contents of the exported file in binary form. this is used to download the file once its created

Fields Added in _columns { } on the python file:

"file_name": fields.char( "File Name" )

"file_binary": fields.binary( "Binary File" )

Code written in create()

I used the create method to save the new record with the binary data

def create(self, cr, uid, vals, context=None):

    # code goes in here...

Create the file:

Then I created the file like this in write mode

file_obj = open( "c:\Users\name_of_file.txt", "w")

file_obj.write( "some sample text..." )

file_obj.close()

Read file and encode with base64

# Re open the file_obj in read mode

file_obj = open( "c:\Users\name_of_file.txt", "r")

file_string = file_obj.read()

vals[ "file_binary" ] = base64.encodestring( file_string )   # Assuming this is in the create() and using the vals{ } to save the data

file_obj.close()

Create record with the filename and binary file data

new_id = super(current_model_used, self).create(cr, uid, vals, context)

XML form and tree views

Add the new fields on the form and tree views like this. This way when you download the file, then the file name will be used.

< field name="file_name" />

< field name="file_binary" filename="file_name" /> <!-- notice the filename attribute. Use this to set the file name with "file_name"  field-->

The end. Hope this helps!

Probably the best solution is to create it server side, base64 encode it, and attach it to relevant document... 
For simplicity here is example.. 
Let's say you want some xml report... 
1. you generate the xml_string then you pass it to a method like this:

def _attach_xml_file(self, cr, uid, ids, xml_string, context=None):

 import base64

        assert len(ids) == 1, "Only one ID accepted"
        model_obj= self.pool.get('your.model')          # the model of record you want file attached
        record_obj= model_obj.browse(cr, uid, ids[0]) # actual record to wich you attach file
        file_name = 'name_your_file_here.xml'
        attach_name = file_name
        attach_obj = self.pool.get('ir.attachment')
        context.update({'default_res_id': ids[0], 
                                 'default_res_model': 'your.model'})

        attach_id = attach_obj.create(cr, uid, {'name': attach_name, 
                                                'datas': base64.encodestring(xml_string), 
                                                'datas_fname': file_name}, context=context)
        return attach_id