Comment 7 for bug 272457

Some further debugging if it helps...
Perhaps the below is unrelated - it appears more of a side effect or another bug uncovered by the presence of the original.

I can open and read the file downloaded to /tmp in vi or gedit.

If I double-click the entry in Firefox's Downloads manager (which is marked as Failed by the way), the file attempts to re-download and then I get a different error:
 /tmp/UbuntuCodeofConduct-1.0.1.txt could not be saved, because you cannot change the contents of that folder.

 Change the folder properties and try again, or try saving in a different location.

So checking permissions...
/tmp has drwtrwtrwt.
/tmp/UbuntuCodeOfConduct-1.0.1.txt is, for some reason, read-only:
-r-------- 1 nick nick 4606 2009-02-21 17:50 /tmp/UbuntuCodeofConduct-1.0.1.txt

A chmod u+w /tmp/UbuntuCodeOfConduct-1.0.1.txt, and double-click on the file entry in the Downloads list again, a new entry appears in the Download list, not marked as failed this time, and if I then double-click that the file opens in gedit, as I would have expected.

My boss John has looked at this, and found that if you manually specify gedit or gvim as application (by clicking the drop-down and selecting "Other...") the appropriate app opens the file successfully.