Ya. I follow. So basically, Ripple provides a framework through which all these exchanges can achieve this.
Right. Ripple provides a decentralized, peer to peer mechanism for transferring balances in a cryptographically secure fashion. This doesn't make gateway IOUs "safe" - you are still exposed to loss if they default on the redemption. It's a hybrid of centralization and decentralization:
Redemption of gateway balances: centralized, possibility of default
Transfer of gateway balances between third parties: decentralized, cryptographically secure
Then there's XRP, which is fully decentralized, cryptographically secure, and deflationary (only 100 billion can exist). With usual assumptions about OpenCoin going open source and all the XRP getting distributed soon.