The blockchain.info website - isn't that like an online wallet? I'm supposed to create an account with them and transfer my btc there? Weren't there a case where an online wallet website was hacked and users of that website were refunded pennies on the dollar? Edit
: And recently Bitonica.com?
However, the paper wallet idea intrigues me. I did some reading about paper wallet - on https://en.bitcoin.it/wiki/Paper_wallet
My understanding is I can go to sites like bitaddress.org to generate addresses, print it out (the address and private keys) and send my bitcoins there. I don't have to actually have that address anywhere in the bitcoin client.
I have a couple of questions though, hopefully not dumb questions.
1) I'm guessing all the addresses generated by bitaddress.org is unique?
2) How do I add the address and the private keys to the bitcoin client for when I actually need to get the blocks up-to-date for when I need to use my bitcoin?
Blockchain.info does have an online wallet of sorts, although the decryption is all client-side scripting from what I understand, so they do not have access to your addresses' private keys.
Yes, that is more or less what a paper wallet is. You print out the private keys, send Bitcoins to the corresponding address, and then no one will be able to access them without physical access to the paper you printed out (unless you had a keylogger on your system at the time, which is why it's best to do this on a Linux live CD). The balance of any address is stored in the blockchain, not in the bitcoin client.
2) If you use bitcoin-qt (aka the "Satoshi client"), I think that a utility called Pywallet will let you import the private key (they usually have an associated QR code so you can scan it with a webcam/smartphone). Or you can use the online wallet from Blockchain.info, which is fairly safe if you need to use it for a short period (again, because the keys are decrypted on the computer you're using, it's probably best just to use a Linux live CD to import and send with it).