Also, I think its extremely impractical to think that a volume drug dealer is going to do physical exchanges. Even if they did opt for that route- Track the guy he did the exchanges with, then beat him with a wrench to find out who he bought from.
You can mix them anyhow you want. If you know how bitcoin transactions work, the idea is simply to break the transaction chain. There are simpler or more paranoid ways to do it, and of course in Bitcoin world it is inviduals responsibility to handle his own coins.
Edit: think about how someone would try to connect the transactions: timing, amounts, etc.
I find it pretty annoying that there seems to be lot of people with strong opinions about bitcoins, but who haven't really studied it that much...
Where would one start - I would like to buy some and see how it all works, and maybe leave a laptop mining some - but I would prefer to research first - where would I start?
If you want to test out how it works in practice, try playing with instawallet.org , maybe buying small amount of coins and tracking how it works. There are also free bitcoins sites, I don't have much experience with them or either with mining. You can track transactions on blockchain.info
Don't know. BTW almost every web based service is a bitcoin mixer in itself, including exchanges, because it is fairly standard way to implement a hosted bitcoin wallet. Exception might be blockchain.info.
Also, I think its extremely impractical to think that a volume drug dealer is going to do physical exchanges. Even if they did opt for that route- Track the guy he did the exchanges with, then beat him with a wrench to find out who he bought from.