Colored coins do exactly what you want - they don't need a new blockchain or a change to the Bitcoin protocol, they allow representing arbitrary assets and contracts with atomic trades, and already have working (though experimental) implementations for a color-aware wallet and p2p trade.
bitcoinx.org is outdated, soon
http://coloredcoins.org/ will be up to provide information. In the meantime here is a promotional video:
http://www.youtube.com/watch?v=fmFjmvwPGKUI see people have mentioned Mastercoin, it's much more ambitious but is also technically inferior, and more centralized (Mastercoins were issued with a time scale factor of 1 month).
It's also crowdfunded, which means Mastercoin will probably be developed faster and better. For that reason I don't think it can be considered technically inferior.
Maybe you mean conceptually inferior? But none of the colored coin implementations are going to be superior to Mastercoin when Mastercoin has so much momentum. I do agree that it is a bit too centralized, dacoinminster has most of the Mastercoins and it's almost like Ripple. The code is open source though so even if that is the case the code can be adapted as needed to other projects. I just think the code written for Mastercoin and the organization around developing it is far superior to colored coin which seems to be stalled in its progress by comparison.
very disappointing when i go to mastercoin.org
the 52 seconds introductory video does not explain what Mastercoin is, its just showing a logo splash screen, wth?
https://sites.google.com/site/2ndbtcwpaper/Colored coin doesn't even have a site. See what I mean?