I guess the question I'm asking here is what does it take for an altcoin to be ASIC-resistant? What does it need to have?
It means that there will be no significant speedup by implementing the algorithm in an ASIC, as compared to a CPU based implementation.
This is usually achieved by requiring a lot of memory, which when implementing this on an ASIC, translates to needing lots of physical area on the chip.
ASIC implementations derive their power from having many physically parallel and pipelined threads on one chip, each requiring a certain piece of chip real estate. Now if your algorithm requires lots of real estate even for one step of the pipeline, there will not but much room to actually parallelize or pipeline the algorithm. Thereby you will lose the parallelizing advantage of an ASIC implementation.
scrypt is such an algorithm. Used for instance by Litecoin.
An ASIC is another way of running a program or calculation or what have you (in our case mining) using a PCB/Hardware instead of Software running on a general purpose computer. GPUs are technically ASICs, their application being graphics processing and output.
ASIC resistance means your crypto is more fairly distributed because their is no centralization of mining due to ASICs bumping out the GPU miners.
If you look into Myriadcoin, Digibyte, Digitalcoin and I believe there are a few others ready to spring up such as Unitus and POND, you will see developers changing out the Single Algorithm Proof of Work model for a Multi Algo PoW model.
Myriad has 5 algorithms that split up the mining and reward structure. 20% goes to the BTC asic algorithm SHA-256D, 20% to the litecoin/dogecoin asic algorithm SCRYPT, 20% to SKEIN, 20% to our special optimized GROESTL, and 20% to QUBIT (the last 3 algos being targetted by GPUs, some better on AMD, some better on Nvidia)
So Myriadcoin as well as others actually embrace ASIC mining while at the same time not allow it to completely govern the landscape pushing Average Joe Miner out of the picture.
A coin like Unitus (to be launched tomorrow) takes this a step further and has no ASIC'd algorithms as the five algos they chose for their multi algo mining model (not to mention they also have merge mining enabled on all algos, not exactly having anything to do with ASIC centralization, just a more distributed reward scheme for those who choose to participate in it).
However, ASICs are not a terrible thing (yet they are if the few, elite, have them all) and ASICs are inevitable. Any computing that can be done with software, can be ASIC'd, it is just a matter of how and how economical is it now (remember, chips are always getting better, more power efficient)
Just my two cents on ASICs. I'm out