Well I am using moodle 2.1.7 and I experienced problems with the [Activity modules > File: (Display Options)]:
I have checked the [Embed] option at the "Available display options" panel and the [Embed] option at the "Display" dropdown menu, BUT nothing happens !? All my test files (txt, pdf, word, powerpoint) have the same problem. When I am clicking on each one always opens a pop up window with the options [open (on external window] or [download] the file.
My problem is that I want these kind of files to be embedded in Moodle (2.1.7 current version) and open internal with all my menus and banners of moodle.
Any idea where is the mistake please?