How to optimize a secure PDF?

I want to put a password security on a PDF document and optimize it to be backwards-compatible to Acrobat 5.0, but am having problems.
I can't optimize unless I first save the file.
But after saving the secured PDF, it won't let me optimize. It tells me if I want to change it, I have to remove the security settings.
First I create the security settings, which won't take take effect until after I save. But it saves compatible to Acrobat 7.0.
I even tried after setting the security, to do a "Save as" with the optimized option, but it won't let me do that either.
Any suggestions?
I have Acrobat Pro version 8. Why does it automatically save to Acrobat version 7.0? Is there a way to change the default saving option? I can't find that preference anywhere.

OK. Got it.
I had the "Run command on" "files open in Acrobat" so all the Output options were grayed out.
I changed it to "Ask..." instead, and that enabled the Output Options.
Several more steps required for the "Ask..." option, but at least I can get what I want.
Thanks.

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