Q.1. What are the advantages and disadvantages, from a usability standpoint, of embedding PDFs in a web page?
Q.2. In general, for the average computer user, which scenario provides the most "streamlined" experience?
Q.3. Would using cookies to remember the options substantially improve Scenario #2?
Thank you!
I hate when a pdf opens in a browser window. But I'm one data point, and one that's probably not interesting to you. What you need to do is talk to your actual customers and ask them instead.
Without more details it's just too hard to say what is best for your specific application. Do users use your app 8 hours a day, or only 8 minutes a month? Do they typically have large screens? Small? Do they access the app via mobile devices? Is viewing the report their primary job activity, or is the report something they'll print and shove in a drawer? Answer these questions and the answer to your usability question will be easier to get.
The bottom line is, ask your users. If you can't, or the answer is indeterminate, give them both options and let them choose.
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