Boy there is a lot of interesting points of view in this thread.

An economic majority is one of the unique Great/Terrible features that bitcoin relies upon.

I saw many posts indicating that bitcoin was not designed/intended for micro-payments, which I do not believe is completely accurate. Since bitcoin has a strong deflationary bias, the average transaction size will DECREASE with time, making payments today that we may consider micro-payments, be standard payments in the future.

Addressing the arbitrary .01 cost of a transaction (or .0005) is an absolute must. Clearly the best solution is to let the miners set the fee that they will accept and process transactions so that competition and deflation can automatically adjust the cost.

As for dealing with wallet dust, probably the easiest way to deal with this is simply to export the keys from any/all wallets and then import them back into one wallet to consolidate your dust. It may still result in a transaction fee but at least you can keep all your pennies in one jar.