I love the idea of a distributed DNS, government cant steal your domain name...
just like bitcoin is the currency used by certain websites (e.g. glbse stock exchange), namecoin is the currency used by the dot-bit.org project.
namecoin can be used to store key value pairs in the blockchain.
dot-bit.org is one particular way namecoins are used. to date, it also happens to be the only service that uses namecoins.
as far as exchanges, there are
https://exchange.bitparking.com and btc-e.
here's more info:
http://namecoin.info