Holy crap. I just realized after all this time that the arrow next to the "Replying to" box expands into the full quoted comment. #UIFail. :D That certainly makes it easier to keep track of what I'm responding to, to @thomashawk 's point.
I have a ridiculously high karma on Reddit (no, I won't reveal my username), and have been an active user since the Digg 2.0 debacle (another promising community shot through the heart by not understanding the mechanics of online communities). I've watched it go from Spez and Kn0thing's playground for nerds to a global community serving a billion pageviews a month, and I think there are a lot of lessons to be learned from their evolution during that time. Perhaps even more so than Facebook, if quality conversation is part of your product's mission.