I think Bitcoin has shown rather conclusively that trust just doesn't work. Thus, I think Ripple will become rather chaotic, and may fall apart, when large trust "nodes" (people with a lot of connections that ripple payments go through) decide to take the money and "exit the network," filling the web with holes.
I don't think we'll know if it can work until it is tried; it does seem to me that the incentives point the wrong way (if my doctor tells me I have six months to live maybe I decide I deserve to run up my Ripple credit to the max....) but maybe I'm just cynical (maybe there will be an equal or greater number of people who decide to give away all their money through Ripple instead of leave it to their deadbeat children).
Good luck to Joel and Jed and the rest of the Ripple team!