[Nursie]

For trading them into 'real' currency you would usually use an exchange, yes. Coinbase (IIRC) simplifies things for merchants by accepting bitcoin and giving them the currency they want.

But for pure bitcoin transactions, no, you can run all the stuff yourself, maintain your own wallet and transact with anyone you like, all without needing anything other than functional bitcoin client software. You need to trust the bitcoin network as a whole, but not any individual authorities.

I'm really not a fan of BTC, personally, but I have looked into it quite a lot...