We have a website setup as a trusted site which is set by group policy. Despite this being a trusted site IE8 still displays the Download File toolbar pop-up instead of file download dialog box.
This used to work in IE6 with the same group policy settings however it is not working in IE8. Is there another setting that has to be in place to prevent this pop-up for trusted sites?
With Windows 2008/R2/Vista/7, the GPMC now has a new set of GPOs for IE management. These are located in Computer Configuration | Policies | Administrative Templates | Windows Components | Internet Explorer. The setting for your issue is under Internet Control Panel | Security Page | Trusted Sites Zone. There is a setting for 'Automatic prompting for file downloads'. Set this to enable.
You may need to run an RSOP check to verify that this setting is not conflicting with a existing legacy (2000/2K3) policy.