I'm using ASP.NET MVC Framework, so I modified my routes for that controller/action to make sure that the served up PDF file is the last part of the location portion of the URI (before the query string), and pass everything else in the query string.
If you're taking the filename from a user input on a form, then that should be validated not to contain escaped characters, which will annoy users.
In order for the filenames to look decent, they shouldn't have any escaped characters (ie, no spaces, etc)... which is a bit limiting. My filenames are auto-generated in this case, and before had spaces in them, which were showing up as '%20's in the resulting save dialog filename. I just replaced the spaces with underscores, and that worked out.
The resulting header looks exactly like what you've described (content-type is application/pdf, disposition is inline, filename is uselessly part of the header). Acrobat shows it in the browser window (no save as dialog) and the filename that is auto-populated if a user clicks the Acrobat Save button is the report filename.