I see a sidecoin as an altcoin, but with an interesting bootstrap method.

The peg is not really possible, unless there is a full reserve, that is, the bitcoins are paralyzed while the corresponding sidecoins exist. Forget about independent coin creation in the sidechain aka govcoin. That makes the new sidecoins unbacked, and the peg fails.

Correct.  I think its worth clarifying that the peg is algorithmic, because its seems from the thread that some people may not understand that.  You, personally, can ask the network automatically to swap unlimited quantities of BTC on the sidechain for BTC on the main bitcoin chain.