Are you only testing this via the Preview tab (to preview the form in Acrobat)? I'm asking because I've seen the tab order get messed-up when testing a form in the Preview tab. Tabbing order has an effect on the "app.setTimeOut" solution in that if Acrobat thinks that there's no field to go to after tabbing-out of TextField1 (because TextField2 is initially read-only), it won't execute TextField1's Exit event when the tab key is pressed while in TextField1, which means the app.setTimeOut code won't even get executed.
Try showing a message box in TextField1's Exit event as follows (in JavaScript):
xfa.host.messageBox("test");
If the message box doesn't show, then you've got this tab order problem. Try saving the form as an Acrobat 7.0.5 Dynamic PDF and test it in Acrobat itself.
There's also the case where you would have only two fields on your form, TextField1 and TextField2 with TextField2 set as read-only initially. In this case, Acrobat wouldn't let you tab out of TextField1 (and wouldn't execute TextField1's Exit event script) because it thinks TextField2 is read-only and can't be tabbed into but I don't think this is your case (I believe you at least have one other field, the "yes/no" drop down list, on your form).
If you still can't get focus to go to TextField2 in stand-alone Acrobat, we'll have to figure something else out.
Let me know what you find out.
Stefan
Adobe Systems
