0/conf will work for retail transactions. I bet the rate of people using a double-spend technique to screw people out of money would be roughly equivalent to the rate of people using counterfeit bills for a cash transaction. And whoever the retailer is can use security cameras or other techniques to track the perp down and prosecute them.
Plus, with online wallets like MyBitCoin, if you trust them and their API, you can have 'instant' transfers and all payments can be forwarded to a different address so I think the practicality of instant payments can be solved via the market even though there is the problem built into the BitCoin software. Heck, banks do not settle for over 24 hours with leads to Herstatt risk (after the German bank regarding settlement risk issues and time zones).