Why does the Bitcoin conversion rate change wildly? I don't understand why the conversion rate for bitcoin changes wildly. Why does it?
As with any traded commodity the price largely depends on the confidence of the buyers and sellers in the future evolution of the price. Basically you pay whatever you feel it is worth. Like stocks this changes over time, as the company or the bitcoin economy in our case evolves.

The wild price swings are not that really that surprising then when it is mostly sentiment driven. Any sudden move in either direction may cause uncertainty, triggering reactive selling or buying that will again trigger more reactions. This cycle is then broken by people seizing the moment to buy in cheap or sell high, stopping the momentum, possibly triggering a move into the opposite direction.