As for the credit network functionality, my primary gripe with "ripple type" systems is that they break the fungibility of money. I no longer have X amount of coins, I have a portfolio of credit lines of varying solvency. So instead of just trusting the bitcoin network (developers, miners etc.), I have to trust the ripple implementation (Opencoin, etc.) and on top of that I need to trust individual credit issuers when accepting credit from them and that their credit lines will remain solvent for some time until I will spend them. When you say "X dollars in ripple", the "dollar" there just fulfils the "unit of account" function of money. It's not a store of value and it's not a (fungible) means of exchange, in other words I can't reliably express my time and purchase preferences as I can with a dollar or a bitcoin.
Their website would often not make you think so, but they agree with you on this. When you say that you have a dollar, for most people this actually means a dollar in the bank rather than in their pocket. So basically they have an IOU from the bank. Ripple just provides a way of transferring this IOU securely without the cooperation of the issuer. It also provides a secure exchange (have you seen Advanced->Trade?), where the distributed system will guarantee that you get the IOU you're bidding for and not be ripped off.
Once people understand how ripple works (probably never for most people) the natural response is to settle al credits immediately to the entity trusted by most people, so the credit market will tend to form a cartel or a complete monopoly. This is not unlike the current banking landscape, only without state regulation. When a trusted entity will fail - and it has allot of incentives to do just that - it will wreck havoc. Maybe there's value in the ripple credit network, but ripple credit is not "money" in the common sense of the word: debt issued by an indisputable single entity with the sole purpose of serving as an exchange medium and with zero incentive for manipulation.
That would imply that everybody in the world trusts this entity. I don't see that being the case, although that would be up to individuals as it should be.