I totally agree - moving to some smaller denomination would be very important from a psychological point of view. I am sure many people who now hesitate to spend 20$ for one BTC would love to have the opportunity to buy 1 million UBT for just 20$.

I think we would have to work on the name though - micro-Bitcoins doesn't have a selling ring to it IMHO...
Moving the decimal point 6 places has some nice properties already discussed elsewhere and is a final solution because we would never have to do it again. In addition to that, we could theoretically keep the name Bitcoin because there is little risk of confusing "old" BTC with "new" BTC when they are 10^6 apart.

Last but not least, the early-adopter greed factor would probably be reduced as well because now everybody can be a millionaire again

As for the other issues on Cusipzzz's list: they are very important as well but somewhat orthogonal to the denomination question. A change of the representation could very well be done easily once a consensus is reached, whereas the other issues require quite some more design and implementation work.