Is it possible to allow user to checkout a document from a library for editing, but restrict downloading their ability to download document? (SP 2010)
If you have Office Web Apps and want users to only be able to edit docs only there, and not in client Office applications, then check this. Strategy here is to define custom SPRole (permissions set) or use built-in
View Only and force it.
If there are no Office Web Apps, then editing any document with desktop Office application involves downloading it first (to browser cache or drafts folders). So preventing download and allowing clients is not possible at the same time.
Document in Word could be saved-as to some local location as soon as it's opened - that is equivalent to downloading it, right?