I can confirm this, Reader 1.5 LE is almost unusable on N80, bigger files cannot be opened due to a "lack of memory" when there is plenty of it. It is certainly a defect in the Reader. Pity as there is no other way currently to read PDFs on S60v3.
I finally can read pdf file (1.13 MB - 19 pages) on my Nokia E61 (S60 v3, Reader 1.5 LE) using Acrobat 4.0 (pdf 1.3), but still have problem with 1.7 MB file (101 pagaes) under pdf 1.3. With 1.7 MB and 101 pages, no error message but balnk screen.
At least, Acorbat 4.0 and below with file size allow 1 MB or less should be OK. Never try pdf 1.4 (Acrobat 5.0). But, sorry, I have to give up here.
Note: I've tried pdf 1.5 (Acrobat 6.0) and 1.6 (Acrobat 7.0) but fail.