It is the long way around, but I swear the quality is higher and file size is smaller. That's why I do this.

..or maybe it's just me.

I do mine the way Steve does it... but I'll give yours a shot too.
It's ridiculous that ID, or Quark even, doesn't have a preset already for this need.
I call bullsh!t.

Mind if I ask a question?

I work mostly in Illustrator. It can output everything I need to do my job.
When I recieve InDesign PDF files, every element is "cut up" into endless clipping paths.

What PDF export settings should I tell my clients to use, so I can read in Illustrator?

Here's hoping someone has relatively bullet-proof settings for all those apps that can generate PDFs these days (assuming they even have settings). Obviously, if they're using Illustrator, tell them to enable "Preserve Illustrator editing capabilities" and you should be fine. (But then, if they're using Illustrator, just have them send an Illustrator file ;-) Otherwise I find it's pretty much a crap shoot as to what you're going to get. Especially with all the masks PDFs generate -- it can be pretty maddening at times.

I'd LOVE to know if there's a basic set of settings that will leave things relatively pristine =)

I'll defer to someone else on that. I would rank my AI skill level at only an eyelash above Intermediate.

For the most part, my clients only need to see what a l/o looks like and if the copy is correct. Image quality and color fidelity, crispness of typography, etc. are not what they're vetting. So, for that matter, I could export at the "Smallest File Size" PDF preset, and it wouldn't matter. But I like to give them an artifact-free visual.

Natcherly, if a file is going to the printer, I export a .ps file and distill it as Press Quality with "Optimize for Web View" and OPI turned off.

That "cutting up" you're seeing is the transparency flattener at work. They need to set it to vector instead of raster, and they need to make sure that all colors are either RGB or CMYK, but not a mix of both. Then they need to make sure they save as a PDF version 7 or higher.

Even then, you're likely to have issues. At its core, PDF is meant for output, not import/further editing.

Right. Got it.
And I believe in Unicorns too.

So what button do I tell them to push?

There are those times when I miss sending a squeaky (marker sketch on layout paper) to a client via foot or bike messenger.

And by "There are those times," you mean "every god-forsaken work day..." I can't even find clients that know what a marker sketch is anymore.