Because Bitcoin is projected to deflate in the future, I don't know how well any of these "tangible" Bitcoin projects will do. What happens when Bitcoins are worth "thousands", how are you going to get change back for that coin? A deflationary system would only have a chance to work in the digital world, since a deflationary system will always require you to break off from what you already have.
Easy, just make new denominations when the time comes. Although each coin costs the same to make, at the same time Bitcoin value rises, I am sure that eventually someone will be able to do it on a massive scale for cheaper.
For the visible public key, you should just use the address' firstbits.
I am showing the first 8 characters, this way it's highly improbable that someone else will generate and use an address with the same firstbits before I issue the coin. I had to generate all the addresses in advance in order to get unique holograms with pre-printed addresses. And having 8 characters also makes it far less likely that I will accidentally deposit the 1 BTC to somebody else's address.
Personally, I would have marked the private key as a QR code instead of or in addition to an alphanumeric form. In any case, I am interested in seeing how this new coin turns out.
You'll probably find that the effort of tearing into the coin will probably be much more than typing 22 characters on a keyboard, there is a hard protective layer on top of the hologram. That said, I am still at the point where I could put them in as QR codes, since I have yet to put them in the coins (a process I am doing solely by myself).
...I suspect casascius might know the best ways, as he has had the paper wallets for a long time now.
I just simply use a copy of bitcoind with the import/export patch applied. To use it, I generally just delete wallet.dat (yes), then start it up with an empty wallet and let the block chain catch up, then import keys, then spend the
entire balance to some more permanent address so the wallet.dat is worth 0 again, and then shut down. It's convenient - I never have to worry about the wallet going out of sync with the block chain, because I'm literally deleting the wallet every time I use it.