I have been trying really hard to get a grip on all this crypto currency stuff, but have more questions than answers. I'm not a total technophobe, but will confess to being a bit behind the curve.

I've read about storing bitcoins in virtual wallets, if these are on my laptop what stops someone hacking in and nicking my hard earned?

Buy a 'Trezor' hardware wallet. This stores all of your cryptos. Never leave them in an exchange or on your laptop/phone. Plenty of info on Youtube.

What is the idea behind these currencies, is it that all other currencies will become obsolete in the future, and everyone will use these?

The 'basic' idea is to rid the world of the Central Banking system which (by design!) continues to rob each and every one of us each and every day.
History is littered with currencies that have come to the end of their lifespan so change is nothing unusual and as luck would have it, and despite what the media push........the world never ended then and it won't end this time.
Electronic currency has been forced upon us for many years now and the blockchain (or similar) will be the next platform.

How will countries balance their economy without being able to print more/less currency to bring inflation up/down?

Due to the fiat system in place since 1971 (the end of Bretton Woods) they can't balance it, not truly. Inflation since '71 is nudging 1500%!
We have a debt-based system that continually relies on more and more currency to repay the existing debt. The extra currency borrowed though increases the debt further as it is also loaded with debt (interest). A system that only ever favours the banks (again by design!).

Who ultimately makes new currency?
Could I just start up a new one and call it Stuckcoin, and have a load of 'in the knows' buy it?

Yes you could.
I'll buy one to get you started.

On the above, how does anyone know that at the inventor (if that is even the right word) of bit coin isn't going to say 'Hey look, I've got a s**t load more of these than anyone knew about'?

The blockchain used will clarify this.

How is the man in the street to know what anything is worth without having his finger on the pulse, when crypto's prices fluctuate so wildly? Basically you could buy a car worth 10.000 bit coins one day, only to find out it's worth 1 bitcoin the next?

Or 100?
I agree, but as we move further then price stability will increase.
Remember, we are still at the very very early stage of this transition.

Who will decide which crypto is going to'rule', a bit like the VHS/Betamax war?

Whichever crypto is deemed to be the best/most useful by the majority (i guess).

This is just a selection of my questions, sorry if all of this has been covered before, but I just ain't getting it.

Great responses TUX

Did anyone watch Spencer Kelly on Panorama this week explain Bitcoin in more detail? If not i'm sure you can watch it on iPlayer.

It started to clarify how it all works for me as well.

As predicted 3wks ago, plenty of money is now pouring back into the market, prices are up and volumes are strong. It's still a very good time to buy so if anyone does happen to have a few quid spare then dive in.

As of today, 17th Feb:
Bitcoin........000
Litecoin.......0

Let's see how the year progresses

The vast amounts of (ever increasing) institutional investment in this sector begs to differ.

I think anyone putting money into this need to have spare cash to right off - this is not an investment it's a gamble on something few people understand.

Says anyone not making money from Bitcoin right now.