Still trying to get my head around all this. But it seems like the philosophy of trying to maintain perpetual traceability of all bitcoin transactions must imply an evr-growing body of data. Doesn't matter that the records are encrypted to prevent falsification of the records, they still have to get bigger forever.

Can it really be true that these ever-growing records must be constantly processed to maintain the system?
This seems unworkable in the long run to me.

Here's another problem:
Quoting from http://forum.bitcoin.org/index.php?topic=7269.0[/url
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"In conclusion:  All this mathematical technology may be a bit of a mouthful, but what it means in practice is that BitCoin works just like cash.  Bitcoin transactions are intentionally irreversible--unlike credit cards or PayPal where chargebacks  can invalidate a payment that has already been made.  And there are no middlemen.  Transactions are completed directly between the sender and the receiver via the peer to peer network."

Well apparently that is all flat out untrue. If MtGox can 'roll back' a series of transactions they don't like, then clearly Bitcoin transactions ARE reversible. Which also means Bitcoins do not 'work just like cash'. Also that MtGox ARE acting as a middleman, with all that implies.
The reasons MtGox decided to rollback are irrelevant. Sure, they were hacked and 500K bitcoins sold into the market by someone who didn't own them. Doesn't make any difference, MtGox is still doing something that was supposed to be impossible, and so one has to wonder. What _else_ is untrue in the theory of Bitcoin?