Yes, but the same can be said of every vendor that has electronic access to your credit or debit card.

If there is no more than spending money in USB wallet then customers have limited downside risk and dodgy vendors will meet their fate with market forces (closed fists) eventually.

I like moa's idea and I don't see why it wouldn't work.
If you add a fee don't they get confirmed pretty quick?

Right but someone will finish it fast as hell right? I'm going to read over it again.
If I make a transfer it's the same block for everyone right?

Yes, you're right. The commonly accepted way around this is described here:
http://bt.irlbtc.com/view/4148.0

Here's a discussion someone else began about a possible POS implementation:
http://bt.irlbtc.com/view/2628.0

If that works then I'd imagine you see credit cards and everything else that goes with conventional banks.
You could also have quick payments based on trusting the bank etc.

Also I'd imagine that the odds of getting ripped off at say a restaurant are pretty low.
I'd let my customers start a transfer and walk out, if it proved to be a bad idea then I'd stop.
If you're not going to make them pay at the time they order though you're not really taking much more risk anyways.

If you're doing it in bulk like the US does it then it's probably not bad.
If you're printing 20,000 or 500,000 I imagine it's not worth it. Not at all.
Lots of R&D etc too.

With how digital the currency is I think there would be way better options like guaranteeing the money.
Something like a check guarantee system. You write a check and someone else does the btc transfer later.
ID is verified and the system checks if you have a history of bad btc checks.

Exactly, still going to be real expensive on a smaller scale though if you want it to be safe.