Omega has appeared to us inside of puzzles, games, and questions. The basic concept behind Omega is that it is (a) a perfect predictor and (b) not malevolent. The practical implications behind these points are that (a) it doesn't make mistakes and (b) you can trust its motives in the sense that it really, honestly doesn't care about you. This bugger is True Neutral and is good at it. And it doesn't lie.
A quick peek at Omega's presence on LessWrong reveals Newcomb's problem and Counterfactual Mugging as the most prominent examples. For those that missed them, other articles include Bead Jars and The Lifespan Dilemma.
Counterfactual Mugging was the most annoying for me, however, because I thought the answer was completely obvious and apparently the answer isn't obvious. Instead of going around in circles with a complicated scenario I decided to find a simpler version that reveals what I consider to my the fundamental confusion about Omega.
Suppose that Omega, as defined above, appears before you and says that it predicted you will give it $5. What do you do? If Omega is a perfect predictor, and it predicted you will give it $5... will you give it $5 dollars?
The answer to this question is probably obvious but I am curious if we all end up with the same obvious answer.
The fundamental problem behind Omega is how to resolve a claim by a perfect predictor that includes a decision you and you alone are responsible for making. This invokes all sorts of assumptions about choice and free-will, but in terms of phrasing the question these assumptions do not matter. I care about how you will act. What action will you take? However you label the source of these actions is your prerogative. The question doesn't care how you got there; it cares about the answer.
My answer is that you will give Omega $5. If you don't, Omega wouldn't have made the prediction. If Omega made the prediction AND you don't give $5 than the definition of Omega is flawed and we have to redefine Omega.
A possible objection to the scenario is that the prediction itself is impossible to make. If Omega is a perfect predictor it follows that it would never make an impossible prediction and the prediction "you will give Omega $5" is impossible. This is invalid, however, as long as you can think of at least one scenario where you have a good reason to give Omega $5. Omega would show up in that scenario and ask for $5.
If this scenario includes a long argument about why you should give it $5, so be it. If it means Omega gives you $10 in return, so be it. But it doesn't matter for the sake of the question. It matters for the answer, but the question doesn't need to include these details because the underlying problem is still the same. Omega made a prediction and now you need to act. All of the excuses and whining and arguing will eventually end with you handing Omega $5. Omega's prediction will have included all of this bickering.
This question is essentially the same as saying, "If you have a good reason to give Omega $5 then you will give Omega $5." It should be a completely uninteresting, obvious question. It holds some implications on other scenarios involving Omega but those are for another time. Those implications should have no bearing on the answer to this question.
Whoop, sorry, I deleted the comment before you replied.
Let us assume that you will never, under any circumstances hand over $5 unless you feel good and happy and marvelous about it. Omega can easily pick a circumstance where you feel good, happy, marvelous about handing it $5. In this scenario, by definition, you will not feel mugged.
On the other hand, let us assume that you can be bullied into handing over $5 by Omega appearing and demanding $5 in one minute. If this works, which we are assuming it does, Omega can appear and get its $5. You will like you were just mugged, but the only way this can happen is if you are the sort of person that will actually hand over $5 without understanding why. Omega is a "jerk" in the sense that it made you feel like you were being mugged but this doesn't imply anything about the scenario or Omega. It implies something about the situations in which you would hand Omega $5. (And that Omega doesn't care about being a jerk.)
The point is this: If you made a steadfast decision to never hand Omega $5 without feeling happy about it, Omega would never ask you for $5 without making you feel happy about it. If you decide to never, ever hand over $5 while feel happy about it, than you will never see a non-mugging scenario.
Note: This principle is totally limited to the scenario discussed in the OP. This has no bearing on Newcomb's or Counterfactual Mugging or anything else.