The Reader does not support DRM-protected PDF's. The bad news is that short of having the publisher release a non-restricted PDF, there's not much you can do about it (anymore).
There was a utility that WOULD strip the DRM from a PDF file, however it no longer works properly. The author, a Russian, was arrested in the US on charges of violating the DMCA, so I don't expect updates. This is annoying in that there are other eBook sites that sell DRM'ed PDFs that the Connect store does not have - and there is no viable way to get those books to the Reader.