This is a very interesting thread.

The key learning I think I got from reading this is that the term "Trust" when used in ripple might have beena bad choice, instead one should think of it as "Line-of-Credit", anytime you grant trust to somebody it is like handing them a credit card linked to your bank account.

The proper use of Ripple, to avoid being scammed, is to have Trust to only one gateway, one which you actually trust to redeem the IOUs you receive. That way there is no way for debt to be rippled through your account. Only trust more than one gateway after you are confortable with the system and you know how rippling works.

The benefit in the Ripple system over just using bitcoins directly can be seen in trying to receive and send small transactions quickly. The bitcoin protocol requires fees for unaged coins, while ripple allows funds to be sent immediately after they are received.