While Safari supports using a PAC File URL, enabling this feature on Tiger may cause performance problems, not just for Safari, but for everybody who uses your PAC server.
Turning on the "PAC File URL" in Safari may cause problems browsing, including broken images. The issue is that Safari doesn't cache the PAC, but instead requests a fresh copy for each object downloaded per page. Details on this problem (and some workarounds) are available via Full-Disclosure.
Mac OS X Hints
http://hints.macworld.com/article.php?story=20050622180552101