The only thing you exchange on Mt Gox is IOUs for USD and BTC. You have to trust that Mt Gox will let you withdraw your balance at the end of day. (The law might help you if Mt Gox defaults, but a gateway can attach legal meaning to its Ripple IOUs as well.) Ripple isn't replacing Bitcoin, and you shouldn't treat gateway IOUs as any more secure than fiat or bitcoin on an exchange. However, Ripple does potentially provide a very interesting replacement for the exchange component of the Bitcoin world.

As for whether XRP will compete with Bitcoin: I agree with the skeptics in this thread that the degree of control OpenCoin has is a good reason to shy away from using XRP as a currency and a store of value. Until such a point where OpenCoin's control has become negligible, XRP won't be as "free" a currency as bitcoin, and I think this is a compelling reason to not use it. This isn't really a criticism of Ripple, because using XRP as a currency isn't the point of Ripple. I have about 200 XRP total, and I'm going to sell all the ones I get in the giveaway immediately. Using or speculating in XRP is fine if you want to do it, but I don't. This doesn't make me less excited about Ripple.