This looks really interesting and could help bring BitCoin to a wider audience.

Couple questions:
1. Do you keep a copy of the bitcoin software (a wallet) running for each user on the server?

2. Did you or are you planning to be licensed as a money transmitter at the federal level?  If I remember correctly this is what got e-gold in trouble.

Thanks!

This is what I thought too, but how does Western Union do it?

From what I've read people can pickup money from Western Union without an ID using the money transfer number:
http://www.bustathief.com/western-union-moneygram-popular-scammer-payment-options/

This is what makes it attractive for scams (and I guess also if you lose your wallet in a foreign country).  Maybe they require ID to send money, but not to receive it?  They are licensed as a money transmitter.

After reading this thread about how using bitcoin is legal/illegal
http://bitcointalk.org/index.php?topic=227.0

I started wondering about some of the service providers coming up around bitcoin and who could be affected by money transmitter licensing rules.  (Individuals using bitcoin don't seem to be affected by this, so I'm thinking of service providers here - specifically those who may want to incorporate or reside in the U.S.)

Apparently Paypal had to become licensed as a money transmitter.  This page has some more info:
http://www.goodwinprocter.com/~/media/Files/Publications/Attorney%20Articles/2003/Risky_Business_State_Regulation_of_Money_Transmitters.ashx

My question is if you became licensed as a money transmitter in a bunch of states, what are the implications of this?
- Do you pay a transaction fee to the state now?
- Are you required to report identity of the sender/receiver to the state?

This sort of thing could become more important as BitCoin attempts to enter the mainstream, or be offered as a payment alternative at retail shops, etc.