Finally, Microsoft has announced that it will be allowing PDF’s to be opened in a browser! From http://sharepoint.microsoft.com/blog/Pages/BlogPost.aspx?pID=1004
Office 365 users wanted a better, more connected and governed experience when it came to working with PDF files within SharePoint Online document libraries. Thanks to your direct comments and active voices in the Community forums, PDF files will now open directly into Adobe Reader without requiring that it be downloaded first. The PDF remains connected and stored in your SharePoint Online document library as you view and edit the file. You can even check it out like other Office documents.
After the SharePoint Online environment has been updated, users must have the latest Adobe Reader version (10.1.2) installed:http://get.adobe.com/reader/
Now I can’t wait for the update.