Can bitcoins replace conventional money? No, for the simple reason that governments will never accept bitcoins for paying taxes. As long as you have to pay taxes, you will need your national currency for that (except if you can convince the government of your country to give up the national currency, or to abolish taxes altogether, which seems unlikely).
Can bitcoins complement conventional money? Yes, they have already started doing so and will hopefully do so to a larger extent in the future.
Governments might not have any choice. They'll have to adapt or move with the times. They still aren't going to just sit back and let us use digital currencies tax-free for long, so they'll have to find a way to tax or deal with them eventually.