One place where it would help with the USD<->Bitcoin problem would be in combination with a parallel currency with that had its money supply automatically adjusting to keep it stable against USD.
As a first step in this direction at some point in the future I'd like to start an Australian cryptocoin that is pegged to the Aussie Dollar. You'd be compromising many of the values inherent in Bitcoin, and introducing central points of failure, but properly managed it would be a powerful force, especially if AUD -> AussieCoin is easy, then you can cheaply, quickly and easily change AussieCoin for Bitcoin without any restrictions.
Right - I guess the main point of failure / excessive trust that you're stuck with is that you need a reliable way to know your own exchange rate. Once you've got that, in theory it should be possible to do the rest just with algorithms in the software.
XertroV and edumundedgar, have either of you looked at
cvTokens? They are a way to accomplish stable currencies like these without trusted parties and within a useful framework of incentives.