Joe and I spent some time yesterday reviewing the difficulty adjustment code and came to the same conclusion.  Even though retargets are done every block, the adjustment uses an exponential moving towards the target difficulty over a period of time. The target timespan for re-adjustment is very short - 30 minutes, whereas many other coins have a target re-adjustment timespan of several days or more.  The effect of this is that when there is a huge influx of mining capacity (as was the case in the minutes after launch) the difficulty changes to account for them very quickly.  This means that people hoping to get an advantage with low difficulty will not be able to, making this extremely fair.  This, combined with the reward being directly proportional to difficulty, means that mining profitability will remain fairly constant from launch onwards.  It doesn't matter whether you have a laptop or a farm of 100 machines, your average reward will stay the same with time, regardless of the network hash.  It is about as fair as a PoW distribution can possibly be**

** the caveat to this is that the reward : difficulty ratio must be high enough to both ensure that coins are minted at the expected rate, AND that the reward is in line with the supply of the old coin that it is being swapped.  IMO the reward is currently too low to fulfill this.  I think the reward needs to be much higher in order to have the PoW period over within a few months as the developer was hoping and right now the daily minting of 5-10k is disproportionate to the 1.25 million coins set aside for the swap.