I only have this problem when I use my non-Admin account. I use an Admin account only to download all software and do updates; downloading PDF files there is not a problem. Therefore I suspect it could be a permissions problem. I have verified permissions but that did not correct the problem. I encountered the problem only after installing Adobe reader 10.0.2 on Mac OS 10.6.6.

I have the problem while using an admin account but it also started when I installed Adobe Reader 10.0.2 on OS 10.6.6. I'm working around the problem right now by assigning PDF files to the Preview program. I will periodically try this again as there are updates to Firefox, Adobe Reader or the OS and will post if I find a solution.

Update: Am now running FF7. Since original problem I switched to using Preview instead of Adobe Reader but that did NOT solve the problem. That seems to indicate FF may be the problem. I inadvertently circumvented the problem by installing PDF Download 3.0.0.2 just to check it out. This is a great Add-on! You can preview a PDF before downloading - which is a standard feature in Safari. I have not had the "Download error" problem since installing the add-on.