Also, I wanted to mention that as Bitcoin gets more and more popular, the more Governments are going to want to get involved. Let's face it the block chain is not completely anonymous. There is a paper trail- an account ledger for every address and transaction. Making cryptocoins more anonymous would help to avoid Government intrusion. Also, this will be backed by ASICs making the network really secure.
If you convert BTC into USD, and deposit it into your bank account, you better claim it on your taxes.