Incremental exchange

I posted this idea in the bitcoin discussion but I was wondering if it would be useful for anybody to develop.
The idea is that you have a multi currency wallet that holds, say BTC and LTC. You want to swap 1000BTC for the equivalent in LTC.
Instead of having to open an account and deposit the whole amount, 1000 btc with a third party exchange you just use an exchange to agree the terms of the transaction with another p2p client. The clients wallet software then automates the transactions between the clients. The transactions happen 1btc, or equivalent in LTC, but in alternating directions until the transaction is complete.
Obviously the main issue would be the time to verify the small individual transactions and price fluctuations happening in the meantime.
The increment size could be increased according to trust. The increment value could be deposited with the exchange in case one side stopped the transaction and the exchange could even up the transaction.

The idea is just to solve the trust issue when using a p2p crypto currency exchange so we can really have a decentralised exchange.