Is "Reclaiming Disk Space" already implemented? How effective will it be?
The blockchain already has reached nearly 1 GB to download and store,

The proposal in Satoshi's paper does not reduce the download requirements, only the storage requirements (see this post to the bitcoin-dev mailing list).  Unless you are able to rely on some trusted third party, you still need to download at least all of the block headers.

If you download only the headers and not the full blocks and treat "buried X blocks deep" as proof that a transaction is valid you are open to a new class of attacks that would not affect a normal full-chain client.  The normal client treats "buried X blocks deep" as proof that a transaction will not be reversed later on -- the check to ensure that the transaction's inputs are unspent is completely separate from this.  A thin client cannot check that a transaction's inputs are unspent because it has only the block headers -- it does not have a copy of the transactions themselves.

The most worrisome of these new attacks have to come from your ISP, but in this day of wi-fi cafes that isn't such a far-fetched scenario.  So, use at your own risk.

I've been picking away at a wiki page dealing with all these issues.