Back to what if BTC took on mainstream fiat:

There are $1.16 trillion USD in circulation (http://www.federalreserve.gov/faqs/currency_12773.htm).  In contrast there are roughly 10 million bitcoin in existence(http://blockexplorer.com/q/totalbc).
If nothing changed today (no inflation or growth) a bitcoin would need to be roughly worth one million times more than it already is to replace USD globally.  Of course this is a huge over simplification because in the processes a lot of factors would change.

The bottom line is bitcoin is still in beta and nobody really knows how this game will play out.  The market incentives in my view are pointed towards holding BTC, investing in BTC(to encourage distributed ASIC mining, and BTC business - full disclosure I have holdings), and mining until the difficulty pushes my hardware out of profitability.  Once the fractional value of bitcoin is approximately $1/mBTC I believe the free market will widely adopt BTC, however the oil-dollar has more solid footing now than it ever has; basically BTC will need to be adopted to trade a commodity greater than oil (I think it will be information).  Now please tell me all the ways I am wrong, which seems to be the point of these forums lately.