And as was pointed out, there is a large variation in the "time to solve", but perhaps if the 2 weeks to adjust were modified to something akin to a Kalman filter, see
http://en.wikipedia.org/wiki/Kalman_filter
one might be able to shorten the "time to change the difficulty" to a very short window?

I see times to solve of one minute or less to over 30 minutes regularly, just watching
http://blockchain.info/

I don't know what the average is but I would imagine that the code might be able to "Kalman filter" the difficulty "on the fly", i.e. every block if the block was solved in less than 10 minutes, and at the 10 minuute mark if no solution arrives. One would hope that the mean time to solution wouldn't "hunt" or wildly oscillate, but would damp down quickly.

This would then be able to correct for large swing in network hashing power very quickly.

The only issue, other than actually writing and testing the code, would be how to synchronise all the bitcoinds and bitcoinqts that will calculate a new difficulty on their bitcoin clocks and the last blocks time. I don't know what happens now at the two week magic moment, or is it a block count number? Changing the difficulty "mid block" would seem to be similar to a new best block kind of signal to those who are mining. If a miner solves first at a higher difficulty than the "corrected" difficulty, so what? It's still valid, it would seem to me.

Just idle thoughts from a old coder that would like to see BTC's ranks swell by making the windows version (bitcoin-qt.exe) more palatable to the masses, that are not geeks. I would like bitcoin-qt to be everything it still is, but look more like http://blockchain.info/, i.e. show the liveliness  of the BTC network. It doesn't have to be musical, though it could be, like http://www.listentobitcoin.com/

I sometimes run a modified version of bitcoind in -printtoconsole mode, where the printf()s are "corrected" to a DOS <=80 character length, or other tricks with \r & \n. It is interesting to watch bitcoind side by side with http://blockchain.info/ and see them both showing the transactions as they are coming in, and the new blocks.

Now if I could capture that and display it in bitcoin-qt...?

I'm the one who offered the splash screen change to try and keep it on "top" and animate it a little during the long VerifyDB() time, and the move the wallet.dat file anywhere change.

Ron