When the document has a open password Adobe Reader will ask for the password when you open the document.
Is this an "Open" password or "Permissions" password? A PDF may be encrypted with either one of them or both or none. If it is encrypted with the "Open" password, Reader will ask you for it before opening. If it is encrypted with both, either will open the PDF. If a PDF is encrypted with "Permissions" password only, Reader will open it without asking password. It is only when you try to change permissions on this document when Acrobat asks for the "Permissions" password. I do not think that Reader allows you to change permissions.