I am curious to know how the Google Docs PDF viewer works? It's not a flash like scribd.com; it looks like pure HTML. Any idea how do they did it?
Google is simply serving up an an image (right click -> save as), with an overlay to highlight text.
You should check out this SO question where others go into more detail.
You should also look through the source of your PDF link, it would appear Google are passing the PDF link through to be converted into an image.
Example:
<script type="text/javascript">
var gviewElement = document.getElementById('gview');
var config = {
'api': false,
'chrome': true,
'csi': true,
'ddUrl': "http://www.idfcmf.com/downloads/monthly_fund/2009/IDFC-Premier-Equityfund-jan10.pdf",
'element': gviewElement,
'embedded': false,
'initialQuery': "",
'oivUrl': "http://docs.google.com/viewer?url\x3dhttp%3A%2F%2Fwww.idfcmf.com%2Fdownloads%2Fmonthly_fund%2F2009%2FIDFC-Premier-Equityfund-jan10.pdf",
'sdm': 200,
'userAuthenticated': true
};
var gviewApp = _createGView(config);
gviewApp.setProgress(50);
window.jstiming.load.name = 'view';
window.jstiming.load.tick('_dt');
</script>
Edit
Also if you were to view the PDF viewer in Firefox with Firebug, you will notice that when you 'highlight' text it's really only enabling a load of divs, I'm guessing Google scans the document using OCR, detects where the text is and provides a matrix of coordinates on which to base the div placement on, when you click and drag it introgates the mouse pointer location to determine which divs to display.