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Furcas comments on The prior of a hypothesis does not depend on its complexity - Less Wrong
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The problem with your example is that 'not-S' is not an event, it's a huge set of events. It's like talking about the integer 452 and the 'integer' not-452.
The simplest beliefs about the events within that set can be extremely simple. For example, if S is described by the bits 1001001, the beliefs corresponding to non-S would be, "the first bit is 0', or "the second bit is 1", or, "the third bit is 1", and so forth.
Events aka hypotheses are sets of programs.
It's OK, the post itself was pretty stupid and I guess it was infectious. Here's my attempt to fix things.