Its just a thought I had, is it possible to have a local wallet with an online blockchain? The local wallet would have to connect to the blockchain to allow transfers to go through. User's wouldn't have to download a huge blockchain and could transfer funds through their local wallet.
Yep - like PRab says - its exactly how electrum works. Much more user-friendly than having to download the huge blockchain.
problem with electrum is that you have to trust random ip addresses about the blockchain integrity though, am I mistaken?
I use electrum but I'm not qualified to answer that. They have a dedicated sub-forum if you want to ask the developers about the issue. Would be interested to know myself.