Ripple does a number of very nice things for Bitcoin. My money says that if Ripple takes off, it gives Bitcoin a significant boost. Why? First, it can in principle make bitcoins easier to buy, and limit the number of points of failure of this infrastructure by acting as a distributed exchange. If the social lending catches on (unlikely in the near term, imho) then you don't even need to depend on gateways in order to buy bitcoins, it would just facilitate trades through peer networks.
More importantly, it hopes to be a currency-indifferent payment system. This means that anybody who accepts any kind of Ripple payment, also accepts Bitcoins. It also means that if you are selling a product, if you accept Bitcoin payments through Ripple, people can pay you in USD and it will be converted on the fly. Basically, it's a distributed, omnidirectional BitPay-like service.
There are more subtle reasons why Ripple would be a boon for Bitcoin: one is that the economics of providing liquidity means that the cost of Ripple payments between gateways in the same currency is related to the underlying costs of moving that currency around. This means that even on Ripple, payments in BTC will tend to be cheaper than payments in USD, so if people use Ripple, they may want to start using bitcoins. (Or they may want to start using XRP for the same reason.)
All of this is assuming that Ripple delivers: that OpenCoin delivers on its promise to open source rippled, and that the consensus mechanism turns out to be a good and scalable and secure way to operate something like Ripple, among others.
The role XRP play in this is uncertain – it does compete more or less directly with Bitcoin, but people may or may not end up using it as a currency if Ripple takes off. It has advantages and disadvantages over Bitcoin as a currency – faster confirmations and cheaper transactions, but (more) limited privacy and a troubling relationship with OpenCoin. Also, everybody who accepts XRP also accepts Bitcoin (as mentioned above), but the reverse is not true.