Will we ever be able to have totally obfuscated transactions that don't even show up in the blockchain (monero style)?
Monero uses Cryptonote which uses ring signatures to hide the sender of any given transaction such that it isn't possible to accurately connect given outputs with given inputs unless the sender revealed that information. Last I knew transactions, and their amounts, definitely were openly visible on their blockchain.
what is the impact of such improvements in privacy regulations wise? i don't think the government will like the idea of it because they can't tax your shit.
This problem is inversely proportional to how decentralized the system is. Check out "torrents" for reference.
Will this be useable within sidechains's "alts" or can you use it within btc transactions too?
This will be available on Bitcoin core after a hard fork. When that happens you'll hear about it..