If you for example sell something today for aprox 10 BTC, so if you will exchange them you will get ~24 USD, but you can fear that btc will collapse overnight and you will lose. The fear is the mind killer and prevent bitcoin in growing stronger. For example in my shop I always have greater exchange ratios than any other places like btc exchanges. if it is 2.3 I will have 2.5 and so on. Even now during the Conference time my shop offers 4.6276$ per bitcoin. Crazy isn't it?
The idea is that you wouldnt price your item as costing 10 BTC or $25, but 10 "basket" (someone pitch me a good name
If bitcoin price goes up or down by 50%, the actual price of your product would still fluctuate, but only by 25% since half of the basket consists of fiat currencies. So you wouldnt have to adjust your prices as frequently and/or you diminish the volatility risk by half if you dont adjust your prices.
If your business likes to keep +- half the revenue in bitcoin or does a similar percentage of its purchases and expenses in bitcoin, you would almost never have to adjust prices. So its simply an intermediary step, something inbetween denominating prices in dollar and denominating btc. If/when BTC prices become more stable and/or business start buying their goods more in BTC than $, you could drop it, but thats still a loooong way off.
BTW, its not only merchants Im thinking off, its all kinds of transactions, also person to person.