@Simon - I actually believe there are lots of lies told about bitcoin - it's reliability and it's anonymity. Take for instance the identity of wallets - once you link an identity to a wallet then you can see ALL the transactions done with it. Really? People want that?
I tend to disagree. For all intensive purposes it's still pretty anonymous, it would be exceedingly difficult to determine any specific details about someone from bitcoin transactions that are on the global ledger (all btc transactions are). Additionaly, you can create as many wallets as you need, so that one specific wallet doesn't have too much activity to warrant a forensic inspection. It's not perfect, but for for the person who wants to perform an occasional transaction, it's a pretty decent solution IMHO. In fact it's far better than having a middle man like PayPal who actually does have your identity, and willingly hands over your transasction history to the government, and marketing companies for profit while charging very hefty fees for large transactions.
Anyone can see the flow of Bitcoins from address to address (see first image). Alone, this information can't identify anyone because the addresses are just random numbers. However, if any of the addresses in a transaction's past or future can be tied to an actual identity, it might be possible to work from that point and guess who may owns all of the other addresses. This identity information might come from network analysis, surveillance, or just Googling the address. The officially-encouraged practice of using a new address for every transaction is designed to make this attack more difficult.
https://en.bitcoin.it/wiki/Anonymity