After installing SharePoint 2010 your users may find that they can no longer open PDF files and are instead forced to save them to their local machine.
In Internet Explorer 8 Microsoft added a security feature to prevent script injection vulnerabilities caused by buggy client software. This feature is activated by a new HTTP header called X-Download-Options which can be set to noopen. When that header is passed with a file attachment Internet Explorer 8 will not provide the option to directly open the file, instead you must first save the file locally and then open it.
SharePoint 2010 utilizes this enhanced security feature in IE 8 to block the opening of file types it considers vulnerable to scripting or other attacks, such as PDFs. You can modify SharePoint’s behavior by changing the Browser File Handling option in the Web Application General Settings of SharePoint 2010. Your options are permissive and strict, with strict being the default.
If your users demand that they open files directly from the web and you are willing to permit the additional security risk you can easily make this modification to your SharePoint web applications.
Thank you to Rick B. who pointed this configuration setting out to me!