1) Store it on coinbase. And don't invest your life savings into bitcoin in the same way that you might not want to "invest" your life savings into Western Union Travelers Checks.
2) What is a way that I can transfer value to somebody in a far away place that is easier (if both parties already accept coins) than bitcoin?
1) Given the history of exchanges is it really smart to store your bitcoin in one?
2) Is only easier if you ignore the process of getting bitcoins and the process of converting them to something else. If you do that then me sending you an email saying "IOU value" is easier.
1) If you don't feel comfortable storing things in coinbase, and don't feel comfortable storing coins on your local machine, then you might not want to use bitcoins. This is fine, but there are plenty of people (like me) who are completely fine with coinbase.
2) If you had an easy way of converting that IOU into USD, or converting it into real goods (by, for instance buying something on newegg), then I would say that yeah, that would be just as good. In fact, that's a great analogy! Bitcoin is a very widely accepted system of IOUs (kindof like a banking system...or cash).
there are plenty of people (like me) who are completely fine with coinbase.
As far as I know, Coinbase has no insurance for their users' coins. If they go bankrupt, you'll lose all your money.
Coinbase is a startup. Failure is the norm, not the exception. Until they get insurance, you shouldn't store more than you're comfortable losing.
Since most consumers can't afford to lose very much, and since most consumers aren't comfortable using an offline storage solution like Armory, they'll need to stick with cash or credit to stay safe. This harms bitcoin adoption among consumers, because they don't have bitcoin on hand with which to buy things on a whim.
2) What is a way that I can transfer value to somebody in a far away place that is easier (if both parties already accept coins) than bitcoin?