Bix Weir claims that bitcoin is not progressing towards being faster and cheaper, enough to use for small transactions, which is why bitcoin will remain a store of value, and litecoin will be used in small transactions, sort of like the historical relationship between gold and silver.
The problem with this argument, is that crypto currencies don't have mass.
It might be cumbersome to trade 1000 ounces of silver for a house, so trading 50 or so ounces of gold might be preferable. With crypto currencies, it doesn't matter if you are trading a few hundred bitcoins, or several thousand litecoins. Likewise, it doesn't matter if you have to get a "piece" of a bitcoin equal to .00000001 bitcoin or .000001 litecoin to buy something small.
There is no point in having both be widely used. Instead, there will be one winner, and one loser.
Bitcoin might do very well before it has to be used, because people will go for the big name. However once these things approach mass adoption, people will be converting bitcoins to litecoins like mad. At that point everyone will have bitcoins and there will not be new buyers.
Now, that's what will happen if the technology stays the same. If bitcoin eventually gets all the speed and cheapness of litecoin, I suspect it will win, and litecoin will not do well.
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