You need to Reader-enable the document. In Acrobat 9, select: Advanced > Extend Features in Adobe Reader
That is what I thought too. So I did extend it, and it still won't work. Here is a copy of my security properties after
I can now save data in the form, but the only thing that is NOT working is this %$#@ digital signature thing. Maybe I don't understand digital signatures enough, but in Acrobat9, when designing a form, I could create a digital signature in the fly. Can't users do that when they view a document in Reader? Is it a properties issue, or can't a user create a digital signature in Acrobat Reader at all? Seems like extending a form takes away the signing property.
I've only ever used a digital signature field that I've added in Acrobat for a form that has to work with Reader. You might want to try that.