My basic problem with them is question three in the FAQ (http://www.bitcoin.org/faq). In a nutshell, "What backs BitCoins? Nothing." It is true that a currency that is accepted by people is by definition valuable at the point in time where they accept it, but that does not mean you can create a backless-currency and have it all just magically work, nor that it will necessarily work across time. A dollar is accepted because you can use it to pay your debts to the US Government. Inductively, another economic entity will accept them for another good or service because they also have that value for a dollar, and further inductively because they know they can then use it for some other good or service, until the inductive net spans the globe. But they're trying to skip the base case. That doesn't work.

(And I suspect even if you could magic wand it into existence it would still be very vulnerable. Take any fiat currency today of your choice. Remove the government backing. How long does it last? Probably not zero, but it probably crumbles at the next crisis at the latest. It would only take one metaphorical bank run to demolish the entire currency in a heartbeat. And it would only take a small nucleus of savvy people to prompt such a bank run, too, and such savvy people definitely exist.)

And in startup parlance, this is just about the worst possible "boil the ocean" plan possible. Virtual currencies will eventually happen and I'd even bet within a century you could live entirely off non-government-backed currencies, but it'll happen organically, not by fiat. And, no joke, it'll probably be some form of MMORPG cash, because those are by far the best seed I can think of for this sort of system to crystallize around, though probably some future MMORPG that makes today's look like tinkertoys.