Wow, I had no idea what happened to this thread- it sure has expanded in my absence! : )
It's a really sore topic with all of us, and for good reason. Several things I can add from my experience:
1. I got into an accident recently and was fully reimbursed even though I was driving "illegally" with my American license, and also the accident was "my fault" (even though I was going through a green light at the time!). They simply never asked about my license.
2. Yes, you can definitely exchange a South Carolina license (and several others) for a French or German one, no strings attached, as long as you can prove you live there...and that is why I made an excursion to the U.S. earlier this year to get my U.S. license renewed in South Carolina instead of Georgia, where it was originally from!
I was lucky to have a quasi-senile aunt who lives in S.C., so I was able to provide the evidence that I "live" in South Carolina now (at her residence) supposedly!
I really dislike living in the UK so I'm trying to get a job in Germany, but it's tough to get an English-speaking job there in my industry (and with unemployment as high as it is right now). However, I certainly don't relish the idea of driving "illegally" so if I don't get an offer within a couple months, I'm going to go for my backup plan and get a French license, which is valid in the UK (My parents live in France- once again I'm in luck- and hopefully it won't be too hard to pretend I live in France with them!)
Good luck to all of you with your driving endeavours : )
3.