Brazil, Argentina ditch dollar in favor of local currencies

All economies are cyclical. Not a good idea, because their currency will never overtake the US dollar, Japanese yen, Euro, or the English pound.

Their currencies may never become hard currencies, but the dollar hasn't been much of a hard currency either recently.

True, but other countries trading with Brazil and Argentina will be hard-pressed to comply when the world economy's currencies are "everything else."

It's somewhat similar to the Euro where individual country's have lost control of their currency and its impact on inflation.

This change is for bilateral trade between Argentina and Brazil where they used to use dollars as an intermediary currency. They certainly aren't going to expect the whole world to use their local currencies.

There are always pros and cons even between two countries; I just wonder if they fully understand the consequences as well as the advantages.

I'm nearly certain that you don't. What are the consequences and the advantages?

Without understanding the details of their respective country's strengths and weaknesses, I'm in no position to spell them out for you. All I know is what happened to many of the countries that chose to participate in the Euro.
Britian on the other hand enjoyed a strong economy as well as a strong currency since the implementation of the Euro.

Here are some of the pros and cons identified by the Brits on the Euro: http://news.bbc.co.uk/2/hi/special_report/single_currency/25081.stm

Then I'll spell it out: It won't make much difference.

What is changing is that the trade used to require the dollar and now it's optional. There are advantages to small businesses in that they don't have to pay currency conversion fees but the respective currencies aren't as stable as the dollar (even with the dollar's recent instability the Real as an example has fared far worse) and this represents risk that larger companies are likely to avoid in the mean time.

The benefits are slight and largely political, a very small boost in local trade may come with this but because all it's doing is allowing the businesses the option to trade in local currency instead of being required to use dollars it's not much of a risk to anyone.

If businesses want to continue to use dollars they will continue to do so.

How big do you think "currency conversion fees" cost their respective economies? It's funny how the world economy lives with those "inconveniences."