I've got Li and Vitanyi's book and am currently working through the Algorithmic Probability Theory sequence they suggest. I am also working through Legg's Solomonoff Induction paper.

I actually commented on your thread from February earlier today mentioning this paper, which seems to deal with the issues related to semi-measures in detail (something that you were indicating was very important) and it seems to do so in the context of the quote from Eliezer.

In particular, from the abstract:

Universal semimeasures work by modelling the sequence as generated by an unknown program running on a universal computer. Although these predictors are uncomputable, and so cannot be implemented in practice, the serve to describe an ideal: an existence proof for systems that predict better than humans.