"Consequently, what's to prevent you from converting today and immediately removing all the converted principal and delay paying taxes until 2011 and 2012?"
1st..you can convert IRA to ROTH over as many years as you want. the 2 years as one was just a stunt of congress. To get you to pay next year's higher taxrate. 2nd I should think that you would want all of the wavx stock in your no tax account (the roth)if your 100k investment goes up to 700K there's still no tax!!!!)
However most would suggest that you do not speculate with your IRA...so there you have it. Personally I have a good chunk in the Roth and the IRA
It looks like the loophole of all loopholes - you move over Wave from IRA to Roth IRA, Wave goes up and you move back the original amount of dollars erasing the tax due. So in theory you never paid income tax on the money left in the Roth IRA.
I went through this exact scenario with my tax pro and it turns out that you must send back the original asset PLUS any appreciation to erase the taxes due.