The third horn basically states that the laws of probability break down when weird anthropic things happen. How can you retain a thread of subjective experience if the laws of probability - the very laws that describe anticipation of subjective experience - break down?
Decision-theoretically I believe in UDT. I would take the bet because I do not attach any negative utility to the presumptuous philosopher smiling, but if I had anything to lose, even a penny, I would not take it because each of my copies in the big hotel, each of which has a 50% chance of existing, would stand to lose, a much greater total loss. It would make no sense to ask me what I would do in this situation if I were selfish and did not care about the other copies because the idea of selfishness, at least as it would apply here, depends on anticipated subjective experience.
I don't think they break quite as badly as the third horn asserts. If I fork myself into two people, I'm definitely going to be each of them, but I'm not going to be Britney Spears.
Most of your analysis of the hotel problem sounds like what I believe, but I don't see where you get 50%. Do you think you're equally likely to be in each hotel? And besides, if you're in the small hotel, the copies in the big hotel still exist, right?
(Apologies to RSS users: apparently there's no draft button, but only "publish" and "publish-and-go-back-to-the-edit-screen", misleadingly labeled.)
You have a button. If you press it, a happy, fulfilled person will be created in a sealed box, and then be painlessly garbage-collected fifteen minutes later. If asked, they would say that they're glad to have existed in spite of their mortality. Because they're sealed in a box, they will leave behind no bereaved friends or family. In short, this takes place in Magic Thought Experiment Land where externalities don't exist. Your choice is between creating a fifteen-minute-long happy life or not.
Do you push the button?
I suspect Eliezer would not, because it would increase the death-count of the universe by one. I would, because it would increase the life-count of the universe by fifteen minutes.
Actually, that's an oversimplification of my position. I actually believe that the important part of any algorithm is its output, additional copies matter not at all, the net utility of the existence of a group of entities-whose-existence-constitutes-utility is equal to the maximum of the individual utilities, and the (terminal) utility of the existence of a particular computation is bounded below at zero. I would submit a large number of copies of myself to slavery and/or torture to gain moderate benefits to my primary copy.
(What happens to the last copy of me, of course, does affect the question of "what computation occurs or not". I would subject N out of N+1 copies of myself to torture, but not N out of N. Also, I would hesitate to torture copies of other people, on the grounds that there's a conflict of interest and I can't trust myself to reason honestly. I might feel differently after I'd been using my own fork-slaves for a while.)
So the real value of pushing the button would be my warm fuzzies, which breaks the no-externalities assumption, so I'm indifferent.
But nevertheless, even knowing about the heat death of the universe, knowing that anyone born must inevitably die, I do not consider it immoral to create a person, even if we assume all else equal.