I have a .net service running on the local machine (Windows 7 x64, IE8, .net 3.5, C#) that returns a file to the browser in response to a user action. Using firefox or chrom
We had this same problem embedded in our ClickOnce deployment of www.Qiqqa.com. I suspect it has to do with the "MIME Type sniffing" that IE does when it gets an application/octet-stream - I guess to protect the user from malicious stuff.
Anyway, to solve the problem, we changed the mime type of our .deploy files to be text/plain - obviously not ideal, but at the same time, I don't know a scenario where we might have a .deploy file on our server that a user would browse to outside ClickOnce.