Actually not quite because it still doesn't allow for central control, but anyway.  Basically the idea is to have no currency base.  Everything is 100% credit.  Although there are obvious problems with this, but you never know maybe there would be a way to work around them.  So here's how it'd go. 
A lot of people on here are aware that banks are essentially legally able lend money that doesn't exist.  It's purely credit.  Simplistically when they give you a loan, they create an account for you and pretend to put money in it. They can do this since in bank accounts the money is nothing but numbers in a computer.  Then you can transfer these numbers over to another bank or use it to buy a house.  As you pay off the loan the lender essentially throws away the principal part of your payment and keeps the interest as free money.  So basically you are paying the bank interest for them to create money for you, which you will promise to send back to them over a period of time.  That way they can "destroy" the fake money they gave you and they keep the interest as profit.  I say lets cut out the middle man: the lender.
So with Credit Coin, or Credits for short, you are able to make money out of nothing.  The catch is you have to pay it back.  Basically when you create this money you are promising to destroy it over a period of time in small chunks.  This way the money supply would be completely controlled by demand for money.  No single credit would permanent so there would be no monetary base.
So of course what would happen if you were unable pay?  Well the credits you created associated with that payment would go bad or essentially disappear.  Haven't decided if the credits should become "debts" or just simply go away.  It might be a good idea if they became debts, that way if the person responsible for paying them could still pay them back and the unlucky person who was holding them could sell them to someone for less than they would be worth as credits.  The buyer would be gambling that the debtor would eventually make the payment. The holder of the debts could also forgive those debts.
On the other end of the stick obviously people shouldn't be able to create as many credits as they want willy nilly.  Then someone would make an account make a million credits send it to another account and then spend it before it went bad.  Someone would only be able to create a small amount at the start, slowing building up trust with the system through payments back to it. Alternatively someone could just use credits and never make any, but they would never build any trust with the system.  Not sure what algorithm could be used for "trust building".
There could be interest on these loans to be paid to miners for processing all the transactions.  Interest could be dependent on a few things: trustworthiness, loan length and payment periods (how long you decide to put between payments).  Obviously the longer loan times and further payment periods the higher the interest.  If you're new and don't have enough trustworthiness to borrow enough money to say, buy a house, you could always borrow from someone who trusts you and has more trustworthiness with the system.  So there is still room for lenders here.
As for the block chain this is what would be happening.  When you create credits, they are completely new.  Just like freshly mined coins in bitcoin.  When you make a payment back to the system those credits, which you earned, not made, don't go into oblivion, they actually travel to the people who are holding the credits you made and it replaces them.  Miners would be getting credits payed to interest in this system so they wouldn't actually be creating money.  Just getting paid for doing the footwork of the system.
Basically it's possible for the entire system to collapse, although the likelihood of this is low.  Usually there will still be demand for money so the system should always have some volume.  There's a lot more too this but I don't have time to write it all.  Suggestions, thoughts and criticisms are welcome.  I don't have the time to program this so it probably won't happen unless a bunch of people jump into help.

Couldn't you probe for an IP of a particular address by sending a small sum of BTC?

If it goes down to about a dollar I think I'll start buying.  All this up and down makes me too nauseated to be in the market right now.

Wow, that's the hard way of getting gold.  Gold is even easier to get in space in asteroids than it is on earth since there isn't any gravity (or extremely little) making it sink to the core.  One medium sized asteroid can contain as much gold as all of humanity has mined throughout history.  Which ties back to bitcoin, since once we start asteroid mining almost all "precious" metals will become worthless scrap beyond their utilitarian uses.  So gold is a bad place to put your money in the super long term.

wow who brought this tread back from the dead?  Bitcoin will start going up again.  10 seconds of exposure on any business news channel during prime time and it's value will explode.

Too bad those 17k bitcoins went into a oblivion never to be recovered.  Perfect time to make the purchase though, with BTC so weak against fiat currencies.

yeah someone is lock crazy tonight

Hahah funny, I'll be in the NYC area on the 17th and 18th on business.  I hate NYC and won't be attending.  I'll be hightailing it out of there the second I can.

I once read, on twitter I think, it may be possible to mine for lost wallet private keys to get long lost BTC.  Made me wonder would it be possible to steal people's BTC by guessing their private key?

At the current prices you'd need to make 8BTC a day to reach minimum wage in the US.  What kind of machine would you need for that?  Probably not worth it.

I have a feeling that's going to blow up, but maybe I'm wrong

Hahaha, I don't think we'll be seeing pizzas for 100,000BTC again any time soon.

Not enough liquidity, you can't buy at those prices.  Everyone is still asking at almost twice the bidding price.

Yeah think about it, one millionaire could really screw with the market just for to rub his rocks off if he wanted to.

You mean the guy who stole all the BTC from MyBitcoin?

Too bad they are all free to not buy then eh? Ohh I know maybe we should make some stupid law that forces everyone to buy that way the price always goes up! wee....!!!  Ok back to reality, keep selling so I can make money.

Then again you could all just keep selling so I can make massive profits

I'm in positive since I sold it all before it went below what I bought it at.

I have found this to be the case in practice as well.  The smaller exchanges usually follow the larger ones.  The problem is usually the market dept is shallower so you may not be able to fill your whole order at the price you want.  It also depends highly on which way the price is going though because it's really easy and fast to move BTC between exchanges, but cash moves slow.  Even though I sold my BTC for a higher value I can't move my cash to MtGox to take advantage of the lower price.  Also if the large exchange bottoms out quickly and the rises the small exchange will bottom out at a higher value.

One secret is to keep you money in a different exchange.  They react slower then MtGox does.  I sold all my BTC for 2 dollars more than the asking on MtGox.  Also you can see where it's going to bottom out so you can put yourself in a good buy position.