Another point: I'm not sure your description of AIXI is particularly great. AIXI works where Solomonoff induction works. Solomonoff induction works pretty well in this world. It might not be perfect - due to reference machine issues - but it is pretty good. AIXI would work very badly in worlds where Solomonoff induction was a misleading guide to its sense data. Its performance in this world doesn't suffer through trying to deal with those worlds - since in those worlds it would be screwed.
Well, actually you're highlighting the issue I raised in my first post: computable approximations of Solomonoff induction work pretty well ... when fed useful priors! But those priors come from a lot of implicit knowledge about the world that skips over an exponentially large number of shorter hypotheses by the time you get to applying it to any specific problem.
AIXI (and computable approximations), starting from a purely Occamian prior, is stuck iterating through lots of generating functions before it gets to the right one -- unfeasably long. To speed i...
Hear ye, hear ye: commence the discussion of things which have not been discussed.
As usual, if a discussion gets particularly good, spin it off into a posting.
(For this Open Thread, I'm going to try something new: priming the pump with a few things I'd like to see discussed.)