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Thanks all for a conversation that notably pushed my own thinking along in several directions.  Some notes for myself, and anyone else interested ...

The lack of categories "out there" in the case of color I'll happily add to my own list of relevant observations/arguments for giving up the notion of a fixed external "reality."   Yes, the hues of rainbows/color wheels are continuous rather than "categorical."  Another relevant example, brought to mind by some recent reading in the history of structuralism and its relation to linguistics, is the speech stream.  Many of the demarcations we use to decipher a spoken sound stream don't exist in the sound stream itself.  And speakers of different languages will parse a given sound stream differently.   Clearly "classification" can involve a fully observer dependent creation of discontinuities in a fully continuous input.  The distinction commonly made between females and males is worth thinking more about in this regard.  Also worth thinking more about is the notion that we needed technological/scientific advances to become aware that categories like color are observer dependent.  A similar story holds for the observer dependence of space and time.  Does this mean we are coming closer to "reality" as we reveal observer dependence, or that we can't escape observer dependence?  I bet on the latter, for the reasons given in the 12 November meeting summary above vis a vis evolution.  What we have at any given time is "less wrong" than what it replaces, but there is no reason to believe there aren't entirely different ways of making sense of things that would equally well work. 

I'm very much intrigued by the increasing focus in the story telling story on counterfactualization.  My intuition is that there is a lot of room for productive inquiry along these lines, and perhaps a way around some of the barriers that have impeded thinking about "consciousness."  Yes, I think they are closely related ideas, and yes, I think that counter-factualization, like consciousness, is probably not something that one can establish the existence of in another person (or another entity) "from the outside" using current techniques of observations.  But no, I don't think that means that counterfactualization isn't worth exploring.  And no, I don't think that means that one can't model it, or look for its emergence in an emergence model.  Yes, I can't do either yet, despite several years of playing with it, but I'm more than encouraged by our conversation to increase my own efforts along these lines.

Equally importantly, our conversation strengthened my intuition that there is indeed an answer to the "so what?" question, even without new observational techniques or models.  Does counterfactualization make a difference?  Yes, if it gets us beyond the Godel limitation of formal systems, if it allows us to get to places that we couldn't get to without it, ie places one can't reach either inductively or deductively from a fixed set of starting positions using a fixed set of rules.  I think we're getting closer to a position in which one can both learn from and go beyond William James: paraphrased as "My first act of counter-factualization shall be to believe in counter-factualization." We can't do it without believing first that we can do it, but if we can do it we can perhaps show both how it is done and in what ways it is "less wrong."