Governments are cracking down on the use of cash in ways that will only help the promotion of Bitcoin. http://www.forbes.com/sites/jonmatonis/2012/10/17/large-cash...
Integrating licit and illicit revenue streams will always be a foundational issue for any illegal enterprise. I have not looked deeply into the implementation details, but Bitcoin does not strike me as a viable money laundering solution. At the point you move large amounts of value out of the ecosystem and into the 'straight' economy, you require the complicity of bankers.
Estimated to be 20% to 25% of GDP compared to an average of 15% to 20% in the neighborhood.
Edit: as an extra fact, "we" (I've never seen one) hold most of 500€ bills that have been printed.