I have dabbled in converting my Steem Dollar payout just to see how it works. And so that you don't have to.

Test with small amounts first!

First of all, you'll need to convert your Steem Dollars (SD) to STEEM.

I'm told that the "Convert to STEEM" button will take a week to convert.

To convert instantly, you can use the internal exchange.

In your Steemit wallet, click on your Steem Dollars balance, then "Buy or Sell" to open the internal exchange.

Enter amount and price under "Buy STEEM". If you want the order to complete instantly, pick a maximum amount and price from one of the sell orders on the right side.

Click "Buy Steem" and go back to your wallet. You should now have a balance of STEEM.

Next we need to transfer our STEEM to an external exchange. Available exchanges (to my knowledge) are Bittrex, Blocktrades and OpenLedger.

Right now Bittrex appears to have the best exchange rate, but is still in maintenance. We will have to wait for them to re-enable their STEEM wallet. In the meantime, you can use Blocktrades or OpenLedger.

Blocktrades

Blocktrades is the easiest way to trade your STEEM. You don't need to register an account. Just select Steem -> Bitcoin, enter your bitcoin receival address, and click on Get Deposit Address.

Now open your wallet in Steemit.com, click on your STEEM balance, select "Transfer". Enter the address shown on blocktrades in the "To" field and the memo in the "Memo" field, and the amount you want to send of course. Hit Transfer, and that's it! Blocktrades will send you your bitcoins shortly.

OpenLedger

On OpenLedger, you can sell your STEEM for a number of other cryptocurrencies, including Bitcoin and Bitshares. Right now the Bitshares market appears to have the better liquidity.

NOTE: There appears to be a delay in the OPEN.STEEM gateway at the moment. My first deposit showed up instantly, the second one has not showed up yet after 30 minutes. Can anyone confirm this?

Register on openledger.info if you don't already have an account. Make sure to back up your keys.

In OpenLedger's Deposit/Withdraw section request a deposit for OPEN.STEEM. Note down the address and memo there ("openledger" and "open.steam-<YOUR_OPENLEDGER_ACCOUNT_NAME>".

Now go to your wallet on Steemit.com and transfer your STEEM to that address and memo.

Once your OPEN.STEEM has arrived on OpenLedger (should only take a minute or so), you can trade it for OPEN.BTC or BTS.

Open.BTC can be withdrawn to your Bitcoin address on the deposit/withdraw section. For some reason it wouldn't let me withdraw everything, you have to leave a small amount (0.00005 BTC or so) for future transaction fees or something like that. Not entirely sure why that is.

I have not found a way to withdraw BTS from OpenLedger, maybe there is a way to do that. In any case, you can convert your BTS to OPEN.BTC through a second trade and then withdraw the OPEN.BTC.

Success?

In this transaction, I converted 24.65 SD into 112.046 STEEM, then got 0.02370977 BTC (~15.65 USD) for that through Blocktrades.

Not quite close to the "1 SD = 1 $" that is advertised.

OpenLedger gave a much better rate, but their OPEN.STEEM gateway stopped working on my second test transaction.

For now I think It's best to wait until more exchanges become available (Bittrex, and perhaps some SD/BTC markets).