Hmmm.....it does look like people are more into the Ripple-style IOUs, then really solving the banking problem. 
There's a difference here: you don't owe to some huge corporation but your friends. For many people, the problem is they are owed by some huge corporations, it's not like when it comes to debts your friend is exactly more credible than some huge corporations. Also, if the debts can only be exchanged between friends, why not just go buying bitcoins from them with cash/bank transfer?(especially the assumption here is you already trust them)
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Also ZeroReserve uses Bitcoin instead of XRP.
Does that mean I have to have some bitcoins before I can trade? That doesn't sound really ideal.
No, you can buy Bitcoins without having any.
Exchanges are designed to facilitate trades between strangers...
That is what ZR does. Even if you do buy from a friend, you would not know. Every deal is "remote",
Zero Reserve is somewhat hard to explain - you need to use it. Just get the code and everything will fall into place.