Ok say I want to buy XRP for BTC
1) Advanced -> Trust (add +) .. enter user Bitstamp, then the amount and currency - typically set this high, certainly higher than the amount you want to put in to ripple. You must repeat this for each currency you want to use.
2) In Bitstamp (or whatever gateway) hit withdraw -> ripple, then withdraw to your ripples address.. within seconds it'll be in your ripple account.
Ok, so the idea is that instead of having bitcoins in my ripple wallet I will have bitcoin IOUs from bitstamp, is that right?
So if I have 2 btc on bistamp and withdraw them to ripple, assuming I trust bistamp for more than 2 btc, I will have a 2 btc bitstamp IOU showing up in my wallet. Correct?
3) make offers to buy and sell currency.
And basically the idea is that bistamp will receive back its IOU and will send me XRP?