Why not mils? Then you can do this:

“Currently, 1₥ is worth about $1.10.”

And if you ever need to clarify which currency you’re referring to:

“Currently, 1₥ BTC is worth about $1.10 USD.”

So let's say Bob offers a bounty of 5 BTC to write a piece of software for him. How exactly would I go about fulfilling that bounty, give him the software, and get the 5 BTC without being ripped off? For example, Bob gets the software, and then decides not to pay me.

You can find a list of exchanges where you can buy Bitcoins here.

Do you mean you want to buy 250 BTC, or you want to buy $1,100 USD of BTC? Be careful. You might want to buy that in a bunch of smaller chunks, for various reasons.

Blockchain.info will give you your wallet's address that can be used anywhere that supports Bitcoin. Your wallet's home page has a download button that will download the wallet to your computer.

Did you lose the wallet itself, or the password?

The guys at http://www.walletrecoveryservices.com/ may be able to recover it for you, under certain circumstances. This is assuming that you lost only the password, and your wallet is still intact.

Think of it this way. You have a $10 bill. Your house catches on fire. The $10 bill gets burned to a crisp, even the serial number. You no longer have the $10.

Chances are, the serial number on the $10 bill is registered somewhere. However, it is unusable, since the bill it was on no longer exists. The issuer has no way of knowing that the $10 bill was lost, and so the serial number will stay registered.

The effect of burning a single $10 bill is negligible on the value of the currency; however, if millions of $10 bills were being burned, it would have the opposite effect of issuing currency, and likely result in significant deflation.

Well, Bitcoin wallets are kind of like that. When the private key in the wallet is lost, the BTC is unusable. Permanently lost (i.e. destroyed) means the BTC is permanently unusable. (Unless a mathematical genius manages to break the encryption... in which case he's either just really lucky, or we're screwed. "We" as in humanity as a whole, and not just BTC users.)