I like the idea of a distributed exchange, it should aid in price discovery and increase market reliability.

But a distributed exchange is a challenge because it's almost a contradiction in terms. A market place is one location that people come to meet where they can exchange, when that location is distributed how do you trade? Exchanging BTC across a distributed network is easy but how do you exchange USD, or CAD across a network, that is the same problem that BTC solves so well.

Some people have suggested a mechanism for direct person to person payments while avoiding chargebacks (no paypal, rather bank deposits). It would be nice to have the distributed protocol incorporate a reliable method of determining an exchange between two parties, the amount, BTC delivery confirmation and other currency exchange confirmation.

A trusted escrow could reliably ensure safe BTC transfers but any dollar currency escrow would incur double bank transfer fees...