As far as I can tell, the only way to actually stay anonymous and have a foothold in the bitcoin economy would be to exchange bitcoins for cash in person with someone.
Even then, once you tried to combine that account with any other you owned that was traceable to you (record in an exchange, email sent to a client containing your bitcoin address) it would be easy to link them together, since the entire ledger is public.
I guess what I'm saying is that your level of sophistication to stay anonymous would have to rise along with the sophistication of an attacker, which is not immediately obvious from these glowing articles on Bitcoin.
You can put your bitcoins into an online wallet like MyBitcoin https://www.mybitcoin.com/ , or an online marketplace like MtGox http://mtgox.com/ , and then send them back to yourself at a new address. As long as the service has a large enough pool of coins and enough transactions (MtGox almost certainly does, MyBitcoin might but I'm not sure) and you don't do anything dumb like always transferring chunks of exactly the same amount in and out in a predictable pattern, it will be pretty much impossible to connect the transactions, so you'll now have completely anonymized money at a new address.
Of course, if you do this to cover up illegal activity and get caught at it (someone searches your computer and finds the private keys for both sides of the transaction) then you could probably be prosecuted for money laundering as well, so I don't necessarily recommend it. But achieving anonymity is not all that hard as long as you pass the money through a large third-party pool somehow.
It's possible to run a Bitcoin laundromat; you control addresses A and D, laundromat controls B and C. Send money from A to B, receive from C to D. As long as the laundromat doesn't recycle addresses and moves a lot of cheddar, it'll be difficult to establish a linkage.
Actually, it sounds pretty easy to programatically establish that linkage if B & C are only used once. Just discount nodes that only forwarded money in their life.
You could make lots of noise by having hundreds or thousands or tens of thousands of nodes trading with each other - but automated analysis could still figure out what they're doing.
To effectively launder money you'd have to actually put it through active accounts that were actively transacting with the real world, and even then, only through each one once.
That sounds like a harder problem than laundering real money. There would likely need to be a real money step in there somewhere.
I agree that many articles are a little too glowing on the anonymous aspect, but the level of anonymity you have with any system is proportional to your sophistication, so I don't see it as a problem inherent in bitcoin. See https://en.bitcoin.it/wiki/Anonymity for more info on the anonymity of the current bitcoin implementation and system.
Thanks for the link, and well said that anonymity is basically always proportional to sophistication. What worries me is that other, related systems people will have experience with (like anonymous file-sharing, public-key encryption, onion routing) have many fewer hoops to jump through to feel confident that they're working correctly. Apples to oranges, but expectations work like that.
If I throw a disk containing my 2048-bit private key into a fire, I can be confident that nobody is ever going to decrypt my files. Getting the same level of confidence for Bitcoin anonymity is a lot tougher.
Even then, once you tried to combine that account with any other you owned that was traceable to you (record in an exchange, email sent to a client containing your bitcoin address) it would be easy to link them together, since the entire ledger is public.
I guess what I'm saying is that your level of sophistication to stay anonymous would have to rise along with the sophistication of an attacker, which is not immediately obvious from these glowing articles on Bitcoin.