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Are you able to view PDF's within your web browser? Do you have previous versions of Acrobat installed, or uninstall them prior to installation of v7.0?
Probably best to troubleshoot in those areas. You could always save the form from Designer and open in Acrobat separately, albeit not a glamorous workaround.
YOu must have view in browser on in order to use the preview feature... IT uses the view pdf in web feature to display the PDF.