That's a good point. Remittances are a big immediate application for Bitcoin.

To illustrate - imagine lots of expatriated Indians are sending bitcoins home. Lots of family members are cashing these out for their local currency (Rupees). The market in India is experiencing a glut in the supply of bitcoins, and the price drops.

Arbitrageurs will spring into action, buying up bitcoins for Rupees, selling them for dollars on Western exchanges, exchanging the dollars back into Rupees, and wiring them to India.

However, the price differential will never shrink (at equilibrium) below the costs of arbitrage. Unless it is somehow cheaper for the arbitrageurs to wire that money to India than it is for the expatriates, Bitcoin will not offer advantages except perhaps speed.