At this time, the current version (4) of WDS does not search inside PDF files. If you want this feature, you need to install a filter. Foxit has a free-for-desktop-use filter available for both 32 and 64-bit Windows:
http://www.foxitsoftware.com/pdf/ifilter/
Works great! You’ll need to rebuild your search index to include the text of the files.
Rebuild the index on Vista by doing a search, clicking the Search Tools drop-down, select Modify Index Locations, then click Advanced and then the Rebuild button.
Rebuild the index on XP by right-clicking the magnifying glass down by the clock and select “Windows Search Options…”, click Advanced and then the rebuild button.
Rebuild any time you add a new iFilter.
You can find more information about WDS iFilters at Channel 9:
http://channel9.msdn.com/wiki/desktopsearchifilters/
You’ll also want to download the current 2007 Office System iFilter Pack