Speaking of which, have people had luck getting a picture of the private QR code on droid phones?  I couldn't get it to work, and was blaming the small code size.  Let me know if it's operator error.

You don't need a smart phone, you can use a computer with anything that can get a digitalization image of the QR code (scanner, cam, mobile with cam...)  and a QR code parser software.

Well you would for an android app... Anyway, I just tried again and instantly scanned it.  I think my shiny silver macbook might have been interfering before.

Some updates:
We still have a lot of preorders coming in, so we're continuing to work as fast as we can to ramp up production. Orders are shipping out continuously now. We hope to change from "preorders" to live "orders" later this week!
Simultaneously, we're working on the next product version. This will include several changes, including custom holograms. It's still a ways off, but start getting excited! We will keep an archive with images of all previous versions on the site.

On redemption:
I'm sorry to hear that some people are having difficulty redeeming. We will post a video soon demonstrating the process. In the meantime, some tips:

• Use a penny to scrape off hologram residue
• A thin layer of tape sits above the laminated qr code. If the residue remains a problem, peel off the layer of tape to reveal a clean QR code
• Use alcohol or nail-polish remover only as a last resort. Newer Bitbills use a higher quality private key substrate resilient to chemicals, but their use won't be officially supported until the next version
• Use a high-resolution scanner if your webcam or phone camera have problems

As mentioned in the FAQ, we are happy to buy back any sealed Bitbills for face value if you don't feel comfortable attempting redemption yourself. We are continuing to work on an easy redemption tool (it will be a flash applet that uses the webcam to send the bitcoins to your address fee free).

I'm offering large bitcoin prizes to anyone who feels like working on Bitbills tools! (this could be an Android app, iPhone app, support on your website, etc; contact me!)

First, is there a better thread to discuss this since it's not strictly bitbills?

Now I've got things running on my MacBook, but it consistently hangs when "Chain is now 5172 blocks high" with "java.io.IOException: Socket is disconnected"

Placed my order, eagerly awaiting my bitbills! I think these are a pretty cool way of introducing some friends and physicalizing a virtual currency since people have a bad tendency to ignore something if it's not in their hands.

I plan of gifting some to my friends who are technically skilled and are aware of bitcoin but hesitant.

This is a good idea, and truly prevents naked counterfeits.  However, it wouldn't stop someone from buying a legitimate bitbill, then making a copy of that bitbill, but with a phoney private key.  They keep the real one, and sell the phoney.  As long as the private key is carried with the bill, with a static public key, there is no way to have 100% trust in it.

The only way I can see to securely handle transactions would be to centralize the private keys.  One way to do this would be to use your exact example, where bitbills generates a keypair that's assigned to the bitcoin keypair.  But instead of printing the QR code for the secondary public key on the card, you give users the options to simply buy bitbills in that fashion, where bitbills.com keeps the bitcoin private key, and gives the user a pdf with two QR codes, one for the bitbill public key (that they can show to prove the money is real), and one for this secondary public key (that you would keep hidden until you hand it over).

You could call this pair of public keys a 'bitnote' (a play on federal reserve note).  To use the bitnote, you just print it on a piece of paper.  When you give someone a bitnote, they use a smartphone with your open source Android/iPhone app to validate the bitnote, and then bitbills.com immediately invalidates the bitnote and generates a new bitnote, OR the user has the option of transferring the bitnote to a bitbill or a bitcoin address.  This would basically be creating a bank with a backed currency.  You can get the REAL currency (the bitbill), or you can have a note representing it.

I assume the flash app is for desktops and laptops with webcams.

Another alternative would be to import a photo of the barcode, taken with any digital camera.

Site is gone
So sad to see it go...

I just got a response from llama to a PM that I sent him a week or two ago. I assume he's still around, perhaps the site is under maintenance or a DoS.