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@snowy_again
Pinched from another forum, here's the answers to some of the questions posed at the Mayor's Questions about the velib scheme:
http://londonreconnections.blogspot.com/2009/03/mayors-questions-0209-on-yer-bike.html
Main flaw appears to be that to prevent theft of the bikes, you have to lock them at a docking station (they don't come equiped with their own lock), which make's 'em pretty impractical unless you bring your own lock.
No idea how reliable the source is though.