Document preview shows EDIT option even if someone does not have edit rights

From what I can see, in the document preview panel in search results one of the options says "EDIT" even though the searcher only has read rights. Is this correct? If so is there a way of changing it so that it says "OPEN" if the document
is read-only to the user?

No way to change it that I am aware of.  For the most part MS doesn't impose a lot of permissions checking on links in dialogues.  To do that would require a lot of extra processing.
Paul Stork SharePoint Server MVP
Principal Architect: Blue Chip Consulting Group
Blog: http://dontpapanic.com/blog
Twitter: Follow @pstork
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