Mac OS X’s Preview application is surprisingly powerful for what is essentially an image viewer. However, if you need serious PDF editing features, you need something like the $50 PDFpen or $95 PDFpen Pro, or the $449 Acrobat.
But what if you just want a more-advanced PDF reader and, like me, prefer to keep Adobe Reader off your Mac? Check out Skim 0.2 ( ; free), an open-source application by Christiaan Hofman, Michael McCracken, and Adam Maxwell that offers a number of useful features for PDF viewing. (Thanks to TUAW for the heads-up.)
Pretty much anything you can do with a PDF in Preview—viewing, resizing, bookmarking, etc.—can be done similarly in Skim, so I won’t get into those features here. However, Skim offers a good number of unique features that enhance PDF viewing and annotating. For example, whereas Preview lets you add floating text notes and oval annotations, Skim offers those features plus the capability to highlight, underline, or strikethrough text; add rectangle annotations; and add Acrobat-like anchored notes (notes that show up as a small note icon, only displaying their text or image contents when you click on them).
Even better, by viewing the Notes Pane, you can see a list of every annotation you’ve made in the current PDF document and quickly jump to any of them.

Skim’s contents pane works much like Preview’s Drawer—you can view thumbnails of each page of the current document or view the document’s table of contents (assuming it has one), although Skim’s table-of-contents display actually lists the page numbers. I also like that when you do a search of a PDF, Skim not only highlights the search term on the relevant pages, but also circles it; I find this approach clearer than Preview’s highlight-only method. (You also have the option to use a standard Find dialog that finds the first occurrence of your search term and then lets you jump to the next or previous occurrence.)
But one of the coolest features of Skim’s table of contents display is that it indicates—by gradients of color—not only which pages of the current document you’ve read recently, but how recently (up to the five most-recently-read pages). That is, the current page has the darkest highlight, with the next-most-recently-viewed page in a slightly lighter highlight, and so on, making it easy to quickly jump back and forth between recently-viewed pages.

I also like Skim’s reading bar, which lets you highlight one line of text at a time; you can move the bar up or down by pressing Option-Up or -Down, respectively, or by dragging it in Text Tool mode. (You can change the color and transparency of the reading-bar overlay in Skim’s preferences.)

Skim also provides a couple interesting options for presenting PDF documents onscreen. A Presentation mode displays the PDF at full-screen size with black borders, allowing you to navigate using the left and right arrow keys; you can also switch to actual size (if that size is different from full-screen size) using an onscreen control. But what I like is the full-screen “kiosk” mode for browsing and reading PDF documents. This mode displays your PDF at full-screen size, obscuring other applications, but still gives you access to Skim’s menus and tools, and you can quickly view the contents and annotations drawers by moving the mouse cursor to the left or right edge of the screen, respectively.
Another useful option is the ability to magnify a specific area of a page without having to zoom the entire document display. Choose Magnify Tool and click on the desired area and a rectangle will appear that contains a magnified view of whatever is under the mouse cursor. Using various modifier-key combinations, you can increase magnification, magnify a larger area, or zoom out instead.

A similar feature lets you preview internal links—links that take you to a different location in the current PDF. Hover the mouse cursor over such a link and a small preview of the destination of that link will appear. Command-click on the link and a small, resizable window will pop up displaying the destination; this is a bit like opening a link on a Web page in a new browser window.

Finally, a unique feature is the ability to take a “snapshot” of a section of a PDF document. For example, if your PDF has a table of data that you find yourself going back to repeatedly, you can take a snapshot of that table and keep it visible while browsing the rest of the PDF. You can actually take multiple snapshots, and can switch between them using the Snapshots list in the Notes drawer. Unfortunately, when you close a snapshot window, that snapshot is deleted; in other words, these snapshots are temporary. (And they’re really just a new PDF-viewing window that’s been resized to show only the selected area, which can be a bit confusing if you try to resize the snapshot window.)

There are a couple other limitations to Skim that have to do with the way the application stores its notes and annotations. These items aren’t stored in the PDF file itself; rather, they’re stored in the extended attributes of the file (basically, metadata stored with the file in the filesystem). This has two significant disadvantages. First, it means that other PDF-viewing and -editing apps, such as Preview and Acrobat, won’t “see” notes and annotations added in Skim unless you specifically use Skim’s Export command to save the file as a PDF With Embedded Notes. (Although even if you do this, Anchored notes won’t appear in Preview.) Second, it means that if you send a Skim-edited PDF file to someone else via email (or copy it to a server or drive that doesn’t support Mac OS X extended attributes), all your notes and annotations will be lost, even if the recipient views the PDF in Skim. Thankfully, the developers have provided a workaround: save your PDF using Skim’s File -> Save Archive command, which creates a compressed archive of the PDF, preserving extending attributes (and, thus, your additions). Still, this is an inconvenience.
Even with these limitations, though, Skim is a slick application with some truly unique PDF-viewing features. It just may take the place of Preview on my Macs, at least for reading PDF documents.
Skim 0.2 requires Mac OS X 10.4 or later and is a Universal binary.