OK, some more news on this. It has definitely an Adobe Component (=Plugin won't work with Safari 5.1 and Lion), but more importantly, an Apple component (Safari 5.1 with Lion will download PDFs instead of displaying them inline).
The Schubert Plugin creates more problems than it solves: a) it slows things down considerably b) it has a tendency to crash on scrolling pages and c) it works strictly within Safari.
What wasn't mentioned is that across OS X, the web rendering engine for PDF's is also called for by other applications, in my case, most notably, Filemaker Pro 11. When a filemaker Page displayed inline PDFs in a web portal just fine unter Snow Leopard, the entire Filemaker crashes ANY time a portal calls a PDF file - and it crashed not just the web portal, but the entire filemaker application!
This is beyond annoying, it has cost me money, and no one seems to be able to solve this. I have had this problem for over a month, and I have no idea where to turn.
I am convinced Apple has the most advanved OS available today. But that doesn't justify ignoring obvious bugs on Apple's end - get it fixed, now. It's as easy as rendering PDFs in Safari again.