How does paying with Bitcoin work? Do I swipe a card that has my wallet address on it? Need details.
All businesses accepting Bitcoin in Arnhem use a point of sale system (BitKassa) that allows them to easily accept bitcoins, without having to deal with any technicalities or security issues whatsoever. Completely hassle free.
As a paying customer, you'll need a mobile wallet that can scan QR codes. The Android Wallet by Andres Schildbach or Mycelium Wallet are both excellent choices.
Apple has been banning Bitcoin Wallet apps lately (shame on them, blocking innovation like this ) so on iOS you'll have to stick with mobile-friendly web wallets like Coinpunk or Pheeva. On Windows Phone, the Bitcoin App (which internally uses a coinbase or blockchain.info wallet) seems to do a decent job.
Are these restaurants etc. holding the bitcoins they receive, at least partially? Or will they exchange them to USD or use BitPay/similar payment processor? Would be great if more 'Bitcoin accepters' also used the 'store of value' -aspect of Bitcoin.
Not yet, they're currently receiving their Bitcoin payments in Euros. Of course we'd rather see everyone not just accepting but also keeping and spending bitcoins, but this is a necessary step in the migration phase that we're still in. Going straight into Bitcoin is still a bridge too far for many people, and we hope this is a great way to help the mass audience adopting Bitcoin one step at a time.
By the way, as for spending bitcoins, versus the objection that some people have who rather keep their bitcoins and spend their fiat: we always recommend the 'double stimulus' approach. Pay anything you can with Bitcoin, and buy back a similar amount of bitcoins with fiat. This way you stimulate the Bitcoin economy (by actually spending coins, and paying for goods and services with Bitcoin) AND you stimulate the demand for Bitcoin (by buying them on an exchange or trading platform). Win-win!