Keep in mind you're playing 'musical chairs' here. If you do this with money you need and the music stops you might possibly be in deep trouble. Only do this with money that you don't actually need, and only do it if you understand all the risks that come with playing arbitrage over exchanges with flaky connectivity. If your initial trade goes through but your offload does not you have a problem.
Yup, the arbitrage opportunities are real. Just yesterday the Canadian exchange (cavirtex) was trading $40CAD/BTC higher than MtGox (CAD); if you had an account with both, and free money to spare, you could take a handsome profit (minus fees, usually around 3% each, so 6% roundtrip)
Doesn't that cause the currency to collapse - only limited by the transaction rate? With no transaction limit you can pump for infinite BTC.
If I can do one transaction per minute for an hour at 6% return that's 10 BTC -> 370 BTC using standard compound interest formula. In 10 hours you're a quadrillionaire.
Edit: of course it's limited by the trades available ...
Yeah but you need to perform the sales with matching funds on both trading platforms. Selling here and transferring BTC/USD to another trading platform is not the method due to the swings and time for verification.
Once the transaction is processed and you have your BTC, then yes. I don't know how fast MtGox releases BTC from the wallets they control though (or similarly, how long it takes BTC China to give you access via their controlled wallets).
I know nothing about BTC.