This has gotten to be a more heated debate than I thought it would be, but IMO Doc, you are perfectly within your rights as a DM to do what you did. You let them hear legends that silver would hurt the creatures they would be fighting. If they decided to not use silver and try Magic Weapon instead, thats too bad for them. If their characters would logically have not had any reason to have encounted a creature with DR before (and at 2nd level, I doubt they would), then relying on meta-game knowledge is that might not apply in this DMs game is faulty logic. For example, in my games, I present elves as a fey race who are generally antagonistic to humans, and who have the ability to use magic to camoflague themselves, and are virtually silent. Does this mean I need to inform the players of what elves are like in my game before they encounter them? Heck no.
What does bother me, and what seems to have become more prevalent in the last few years is that some players think they they should have unrestricted access to all books, and should be able to get away with using meta-knowledge in game without consequence. Now, I won't stop a player from buying the DMG or MM (especially if that player DMs as well), but I make it very plain that I WILL NOT allow them to reference anything but the PHB or books with relevant info to their character during play. One poster earlier called DMs who do this tyrannical or on a power trip, but that just isn't the case. I have run and played in games where the game was ruined by players constantly trying to challenge the DMs decisions, find out opponent's weaknesses or stats, look up spells cast on them, and generally making themselves annoying twinks. Thus, the easiest method to insure this does not happen to to not allow players to look up such information during the game. Does it work- yes. I have been running a game for 11 years with these restrictions, as well as where the players don't even have their stats in front of them (I keep track of them), and they trust me not to screw them over (which I haven't). IME, players who do use meta knowledge routinely are usually very insecure people who MUST show that they have some degree of power in all situations, and cannot stand it when they fail. It basically boils down to an issue of trust between the players and DM- if one side cannot trust the other, then restrictions must be placed on conditions in order to insure that everyone can have fun.