Hi Dave,
sure - SSL is still used with you settings for the communication channel. When you ignore client certificates you force Exchange and iPhone to use password authentification over SSL. Also when the communication is "protected by SSL" you are using a very lower security level now. I do
not want to do this in my environment, but you are free to do so in yours. Also your users need to change their passwords on iphone every time their domain passwords changes.
Have a look at the Apple whitepaper "iPhone in Business" here at page 2 about certificate settings:
http://images.apple.com/iphone/business/docs/iPhoneMSExchange.pdf
Apple does not commend to set "ignore client certificates".
However - this does not explain why non-pdf and non-jpg attachments are working fine with client cerificates all the time.