You should rely on Mike Hearn's proposal. As far as I know it's the one that already partially implemented.
To me it looks identical to hashcoin's, what am I missing?
The difference is what they mean when saying - "set sequence number to zero"
3) To start off, Tx B has seq 0 and gives all coins in TxA back to you. When you need to give mtgox money, you send him a signed replacement of
TxB that is final, and sends some of TxA to him and the rest back to you. These are all offline, not sent to network.
As hashcoin says, tx replacement is indeed designed to be used along with multi-sig outputs. If you look at the contracts that use it on the wiki, you can see that it's most often used to prepare a default/fallback option that closes the contract if one of the parties goes away or stops agreeing to changes in the primary contract.
What I was asking/wondering is where you actually need
replacement rather than just locktime. I don't understand the utility of the TX replacement mechanism. It seems to me to serve no purpose.
locktime is what is needed for the escrow, not replacements. In general, if a transaction is going to be "updated" it must not be finalized or else nothing prevents a miner from including it. Either it should be missing required signatures, or future-dated. In any case, the first valid TX incorporated into a block gets to spend a given output.
Replacements are pointless because to a miner, a TX is either ready-to-include-in-a-block-right-now, or not. If not he should just ignore it. There's no reason to hold invalid TX around. The party who broadcast the TX should just hold onto it themselves and broadcast it when the time is right.
This confusion comes up again and again and seems to be the reason many people object to enabling locktime, because replaceable TX are hard to reason about. I agree, which is why I suggest
Enable nlocktime only, NOT replaceable TX. Locktime is easy for everyone to understand: it's just a post-dated check.
If I take a post-dated check to deposit at a bank, they should turn me away and tell me to come back in the future. They should not hold onto it in their "memory pool" and agree to deposit on that date, provided it is not "updated".