Yes, I misunderstood the conservative reference.
As far as the hair-splitting, there are a couple of ways to view it. On one hand, Talmud has a concept of "being despicable (person) with torah's permission", meaning technically following the law but not its intent. This refers to cases where some moral violation is involved, such as stealing, or, as in your example, defeating the purpose of Shabos (which would be reflecting on creation) by setting up the tv timer. In other areas, where the law has no obvious moral intent finding a hack is considered praiseworthy. So why have these amoral laws in the first place? Maimonides held that besides formalizing the moral principles (how to treat stealing in a system of courts) the law is to train the mind, which makes you think through a lot of things you do throughout the day.
Orthodox judaism has a lot of reasonable answers for a lot of things. This is why I found it so damn hard to abandon, it's so surprisingly consistent in many places. I think there is something to be said of meme survival that causes religions to become close to reasonable over time, and judaism probably had the longest run out of all of them.
David Friedman has just posted on this. As it turns out, the debate about finding "creative" loopholes of Biblical law is isomorphic to the controversy over constitutional interpretation in the U.S.
Exodus 22:25, Leviticus 25:36, and Deuteronomy 23:20-21 forbid Jews from charging interest on loans to "your brother" (other Jews). (This is to me the most convincing argument against Judaism and Christianity, because it's too simple to argue around. That proscription is just wrong, in exactly the way you would expect laws written by uneducated tribal people to be wrong.)
Roman Catholics believe they must follow the Old Testament laws, except for the ones they don't have to follow; but during much of the middle ages in Western Europe, this was one of the ones they had to follow. They interpreted "your brother" as meaning "brother Christians". So Jews could lend to Christians with interest (and, presumably, Christians could lend to Jews). This was convenient for everyone. The Jews were necessary to work around an irrational moral prohibition of the Christians.
Of course, the Jews had to take on the guilt of violating the moral code, even though it was for the benefit of the Christians. (This was also convenient; it meant that after some Jews had loaned you an especially large amount of money, you could kill or expel them instead of paying them back, as the Spanish monarchy did in 1492).
Later on, some orthodox Jews hired goyim to turn lightswitches and other electric devices on and off for them on the Sabbath. They're called Shabbos goy, the Sabbath goy (thanks, Alicorn!).
JCVI is considering moving from an on-site hardware grid, to cloud computing. There are lots of reasons to do this. One is so that Amazon can be our Shabbos goy.
We develop lots of bioinformatics software that we're supposed to, and would like to, give out to anyone who wants it. But if you don't have 800 computers at home, connected using the Sun Grid Engine with a VICS interface and using a Sybase database, with exactly the same versions of C++ and Perl and every C++ and Perl library that we do, you're going to have a hard time running the software.
We can't put up a web service and let anybody send their jobs to our computers, because then some professor is going to say to their freshman class of 200 students, "Today, class, your assignment is to assemble a genome using JCVI's free genome assembly web service."
If we could charge users just a little bit of money, just a fraction of the cost of running their programs, we could probably do this. Then people wouldn't be so cavalier about running a program repeatedly that takes 500 CPU hours each time you run it.
But we can't, because we're an academic institution. So that would be evil.
So we need a Shabbos goy. That's Amazon. We can release our software and tell users, "All you have to do to run this is to get an account on the Amazon cloud and run it there. Of course, they'll charge you for it. They're evil."
(The Amazon cloud is evil, BTW. They charged me for 21G of RAM and then only gave me 12, and charged me for 24 1GHz processors and gave me about 1/4 of that. I spent over $100 and was never able to run my program; and they told me to stuff it when I complained. But that's another story.)
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