I recently deployed Adobe 9.2 within our organization. I used the Adobe Customization Wizard 9 to transform the install set, and selected the "Display PDF in Browser" option as default.
When opening a PDF linked from a web URL, we get the message: "The Adobe Acrobat/Reader that is running can not be used to view PDF files in a Web Browser. Adobe Acrobat/Reader version 8 or 9 is required. Please exit and try again." This occurs under IE8 and IE6, in both Windows XP SP2 and Windows 7.
If I launch Adobe Reader and unselect "Display PDF in Browser" in preferences, PDFs open normally.