Trying to get a handle on this market bailout business

So, like millions of others this weekend, my wife and I sat and talked about the looming billions (trillions?) set to head to failed Wall Street investment banks.
The big question on our minds: Why, exactly, should we be forced into assuming the debt of those who made bad investments or enticed others into risky (or, as is increasingly coming to light, downright reckless) behavior?
I'm no economist, so I can't speak to the health of worldwide markets. But I do balance a checkbook every month. And we were on the verge of jumping into the housing market.
Most of the journalism I'm reading focuses on these "credit-default swaps" and other crazy products these firms were creating for themselves, but misses the point: we're all on the hook for a ton of money. And I, for one, am pissed about it. I never want to hear anyone tell me about how economic markets are "self-sustaining" ever again.
Just this morning I read something that made me feel like I'm not all alone in being upset about this. How about some more of this?
Here's what I want to know (at the risk of sounding selfish):
Everyone has been talking about a "market correction," and we've seen housing prices slide toward more reasonable amounts. So what happens now?
Does this bailout keep a two-bedroom, one-bath house in Oregon priced in the mid-200s? Who's going to pay that? What about all the houses that are in the "bad debt" category? What happens to those homeowners? Do they have their mortgages marked down? Is their house suddenly worth less than they paid?
Everybody's rushing to find the bottom and rightly so, but what's real here? My household has talked for years about how housing prices seemed unreachable for a professional couple looking to buy their first house. I've been told by some about how they bought their first house 25 years ago for about the same as their combined annual salaries (at the time): about $30,000.
Will we ever get back to reasonable prices?
I'm not looking for a handout, but I want to own a home and I don't want to see friends and family losing their shirt when they made the best investments that were available at the time. But I just don't see how this bailout is any more sustainable than the spiraling markets that got us here.
And I don't see any news organization tackling these issues. Don't just tell me what the fed says. Tell me what it might mean. Let's not look back on this (as we do with the run-up to Iraq) and have to slap ourselves on the head and say, "Where were all the journalists? Why weren't they asking questions that mattered?"