My RE was the last step as well, it was after the "Workspace enable form" step.
I have run another test. I removed the RE step, and it's working the same way as before; everything worked on a desktop that has the Acrobat Pro.
I then launched the form/process in Workspace on a desktop that only has Reader-8, the form got rendered in the browser, and I saved the PDF (a blank copy, no data).
Then I ran this PDF through the RE browser interface, and it was successfully Extended. When I opened the extended PDF, there's a Digital Signature icon, the "message" (which was entered when applying the rights) was behind the "i" button; but there was no commenting icon (unlike some other non-form PDF files, those files got an extra commenting icon). There was no pop-up warning.
Some other "form" type of PDFs also didn't get the Commenting icon after extended through the browser interface. I thought we could put some yellow stickers onto forms before? ES/Reader-8 doesn't allow you to do that anymore?
I have run another test, this time I removed all the scripts behind the Form:ready event, there's no other script. But it didn't help, I still got the popup warning. So, what could have caused it to think that the form got modified after the ApplyUsageRights ??? Why the Rights don't stick?