How can merchants accept Bitcoins while keeping it in line with the original USD value? I mean, if a pizza costs $25 and a BTC is $500, the pizza store should be announcing a pizza for 0.05 BTC. However, if tomorrow the USD value of a BTC doubles or halves, that announced price for the pizza is no longer adequate.

How do merchants balance this?
Until Bitcoin stabilizes sufficiently, prices will be listed in local currency and be payable in an equivalent amount of Bitcoin, or if prices will be listed in Bitcoin, this price will have to be constantly updated.

I.e. price would be listed in USD and the amount of XBT due would be calculated just before the bill.