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The demurrage encourages it's own use as a medium of exchange - use it or lose it. Hoarding of other currencies is not a problem.

I recommend reading David Graeber's "Debt: The First 5,000 Years". IIRC it has a good chapter on demurrage, as well as covering many historical currencies which by accident of design were similar to modern demurrage currency in operation.

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What incentive exists for anyone to use this currency at all? Why would I ever accept a "freicoin"?

Well there's all the advantages that bitcoin has (low transaction fees, quick processing, no chargebacks, etc.). We're also working on tools & services that would make transacting in Freicoin as easy as possible, so that for example you can set a limit on how many freicoins you want to hold, and the remainder will automatically be swept into an exchange account and converted into bitcoins or dollars.

I'm not a bitcoin believer, but what advantage can you come up with for "freicoin" that bitcoin won't simply adopt?

"Come over and get kicked in the nuts! Free car service and short lines!"

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