I think to really understand the answer to this question one should ask "What is money?"  I think Bill Stills does a great job of covering that, but I also remembered this excellent audio clip that had some valid points:

http://www.thisamericanlife.org/radio-archives/episode/423/the-invention-of-money

Their answer is that money is fiction, but I would say that currency is fiction and not money.  I would consider gold to be a currency AND a money, but the Federal Reserve Note is just currency since it has no intrinsic value other than toilet paper or kindling in the event of currency failure.  So in essence the FRN is fiction, it can be printed at a whim and can be exchanged for REAL money or commodities (that is where the scam lies).  That isn't to say that once the US defaults we will not have to trade commodity or other assets for the foreign debt being held.

I am pretty impressed with everyone's responses on this posting and have thoroughly enjoyed the discussion so far.  I think Bitcoin will succeed as a currency, mainly because everyone supporting it here is quite intelligent (forget the speculators).  It is just a matter of time before it catches on (we need decentralization around the globe).