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The the psd file is a clean cut. Looks great (1) enter image description here

Still looks good when brought into Illustrator (2) enter image description here

But then as a PDF this ugly black line appears around the edges of the psd file (3) enter image description here

Any ideas what causes this because it looks really bad sending this to the client?

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    Anti-aliasing of the transparency in Acrobat. Won't show when printed, but can show depending upon PDF viewer and PDF Job options. – Scott Sep 19 '13 at 15:03
  • @deecemobile: one thing i notice is that the pdf screenshot is smaller. Sometimes rendering artifacts show up at certain zoom levels for reasons very similar to why moire patterns show up in high frequency patterns. When the PDF is zoomed in to 100% or more, does the problem go away? (and yes, as scott points out, there is a lot of AA going on--the pdf is blurry compared to the illustrator and psd specimens) – horatio Sep 19 '13 at 15:08