I do really see a problem now. Probably it is not a good idea to exchange IOUs automatically. It is not only the problem of trust, but the problem of different issuer's policies too. It can't be solved with a simple numeric field, there should be some way to attach a contract to the IOU, so that when one grants trust, s/he could accept the terms. But wait... Looks like there are contracts in Ripple: https://ripple.com/wiki/Contracts .

TradeFortress, what did you do to issue IOUs? I just don't know how it is done in Ripple.. Did you have to create and sign a contract?