I think it was a good show, as is usually the case with the Planet Money team.
At 16:40 into the podcast they talked to Professor Ronald Mann of Columbia Law School who said that it is legal... for now, but also said:
The government could decide that bitcoin is basically being used to buy illegal stuff, like drugs or child pornography. And in that case the
government could try and shut down bitcoin on those grounds.
If you put something out on the Internet as a payment system, and you make it available to people, what you have to observe as a regulator is what are the things it is useful for. OK. And if its main attraction is it is wholly anonymous -- that's not something that ordinary consumers care about. The main people that are really excited about a wholly anonymous payment system are people that are violating the law.
He also doesn't think it will take off, and will die within a few years.
I suggest making comments on that podcast entry about the many other attractions of bitcoin, or at least voting up ones you agree with.
http://www.npr.org/blogs/money/2011/07/12/137795648/the-tuesday-podcast-bitcoin