It looks like the 18 thousand iPads that the USAF had planned to buy will be staying in the warehouse; the purchase order for the initial 2800 odd tablets has been suspended.
The Air Force had planned to buy the iPads to use as digital flight bags. They would have replaced the voluminous quantities of paper carried by pilots.
But it turns out that there was a minor oversight when the origin paperwork was filled out. The order specified that the iPads would be loaded with GoodReader, what is probbly the best PDF app for the iPad. Unfortunately, this app was developed by a Russian company, which means it doesn’t meet the security requirements for Air Force equipment. And so the order was cancelled.
I can understand the concerns; the military needs to maintain a higher level of security than consumers. But this was not a good reason to cancel the purchase. There are many PDF apps for the iPad, Admittedly, GoodReader was the best, but Adobe and Bluefire have both made good apps and they offer DRM support.
In fact, this is really nothing more than a paperwork issue; I expect the USAF to follow up with similar purchase order fairly soon, only this time it will specify another PDF app.