Matt Cutts: We absolutely do process PDF files. I am not going to talk about whether links in PDF files pass PageRank. But, a good way to think about PDFs is that they are kind of like Flash in that they aren't a file format that's inherent and native to the web, but they can be very useful. In the same way that we try to find useful content within a Flash file, we try to find the useful content within a PDF file. At the same time, users don't always like being sent to a PDF. If you can make your content in a Web-Native format, such as pure HTML, that's often a little more useful to users than just a pure PDF file.