Now that I am letting folks download AIR files from my server, I realized apache didnt know how to serve those file. So because it didnt know the mime-type for air, it just spit out the binary to your browser instead of helping the browser know to tell you to download it.

Fixing that was easy, opened up my httpd.conf and found the line that had the mime-type for zip files (air is really just a zip). and I added air as an extension. The release notes on labs.adobe.com state that the actual AIR mime-type should be listed as:

AddType application/vnd.adobe.air-application-installer-package+zip .air

Bang! life was all good.

ps. Thanks to Ryan for letting me know it was wonky.