So If i was pure evil and I decide to ruin the market by selling all my BTC for 13 cents each,
which satisfies all the bids on MT gox, I could generally ruin the whole market right?
This would be about as evil as selling delicious cheeseburgers for a $.25.
People want bitcoins, you can see this from all the people trying to pay over $1 for them. Far from ruining the market you would be pleasing lots of market participants.
or If I had 500k usd in my bank account and decide to buy up every coin on mt gox I could greatly change the price of the btc.
Likewise, this would please all the people trying to sell coins, and not ruin anything.
dosent that mean that mtgox is insanely unstable?
Prices change in markets to reflect people's desires. A controlled market is no market at all. MtGox is the best and most stable bitcoin market that exists right now, but there are others and there will be more. There will probably be more volume and lower volatility in the future, but no one knows for sure.