Here is a couple of articles that I read, which relate to this conversation. I've cropped them both, as you can probably tell.
Information in the Holographic Universe
Theoretical results about black holes suggest that the universe could be like a gigantic hologram
By Jacob D. Bekenstein
August 2003 issue
Magazine Content
PHYSICS
Ask anybody what the physical world is made of, and you are likely to be told "matter and energy."
Yet if we have learned anything from engineering, biology and physics, information is just as crucial an ingredient. The robot at the automobile factory is supplied with metal and plastic but can make nothing useful without copious instructions telling it which part to weld to what and so on. A ribosome in a cell in your body is supplied with amino acid building blocks and is powered by energy released by the conversion of ATP to ADP, but it can synthesize no proteins without the information brought to it from the DNA in the cell's nucleus. Likewise, a century of developments in physics has taught us that information is a crucial player in physical systems and processes. Indeed, a current trend, initiated by John A. Wheeler of Princeton University, is to regard the physical world as made of information, with energy and matter as incidentals.
This viewpoint invites a new look at venerable questions. The information storage capacity of devices such as hard disk drives has been increasing by leaps and bounds. When will such progress halt? What is the ultimate information capacity of a device that weighs, say, less than a gram and can fit inside a cubic centimeter (roughly the size of a computer chip)? How much information does it take to describe a whole universe? Could that description fit in a computer's memory? Could we, as Wiliam Blake memorably penned, "see the world in a grain of sand," or is that idea no more than poetic license?
Remarkably, recent developments in theoretical physics answer some of these questions, and the answers might be important clues to the ultimate theory of reality. By studying the mysterious properties of black holes, physicists have deduced absolute limits on how much information a region of space or a quantum entity of matter and energy can hold. Related results suggest that our universe, which we perceieve to have three spatial dimensions, might instead by "written" on a two-dimensional surface, like a hologram. Our everyday perceptions of the world as three-dimensional would then be either a profound illusion or merely one of two alternative ways of viewing reality. A grain of sand may no encompass our world, but a flat screen might.
Black Hole Computers
In keeping with the spirit of the age, researchers can think of the laws of physics as computer programs and the universe as a computer
By Seth Lloyd and Y. Jack Ng
November 2004 issue
Magazine Content
PHYSICS
BLACK HOLE COMPUTER may sound absurd but is proving to be a useful conceptual tool for researchers studying cosmology and fundamental physics. And if physicists are able to create black holes in particle accelerators--as some predict will be possible within a decade--they may actually observe them perform computation.
What is the difference between a computer and a black hole? This question sounds like the start of a Microsoft joke, but it is one of the most profound problems in physics today. Most people think of computers as specialized gizmos: streamlined boxes sitting on a desk or fingernail-size chips embedded in high-tech coffeepots. But to a physicist, all physical systems are computers. Rocks, atom bombs and galaxies may not run Linux, but they, too, register and process information. Every electron, photon and other elementary particle stores bits of data, and every time two such particles interact, those bits are transformed. Physical existence and information content are inextricably linked. As physicist John Wheeler of Princeton University says, "It from bit."
Black holes might seem like the exception to the rule that everything computes. Inputting information into them presents no difficulty, but according to Einstein's general theory of relativity, getting information out is impossible. Matter that enters a hole is assimilated, the details of its composition lost irretrievably. In the 1970s Stephen Hawking of the University of Cambridge showed that when quantum mechanics is taken into account, black holes do ahve an output: they glow like a hot coal. In Hawking's analysis, this radiation is random, however. It carries no information about what went in. If an elephant fell in, an elephant's worth of energy would come out--but the energy would be a hodgepodge that could not be used, even in principle, to re-create the animal.
Box: Overview/Cosmic Computers
*Merely by existing, all physical systems store information. By evolving dynamically in time, they process that information. The universe computes.
*If information can escape from black holes, as most physicists now suspect, a black hole, too, computes. The size of its memory space is proportional to the square of its computation rate. The quantum-mechanical nature o finformation is responsible for this computational ability; without quantum effects, a black hole would destroy, rather than process, information.
*The laws of physics that limit the power of computers also determine the precision with which the geometry of spacetime can be measured. The precision is lower than physicists once though, indicating that discrete "atoms" of space and time may be larger than expected.
edit: some more snips from the black hole article
Analyzing the universe in terms of bits and bytes does not replace analyzing it in conventional terms such as force and energy, but it does uncover new and surprising facts. In the field of statistical mechanics, for example, it unknotted the paradox of Maxwell's demon, a contraption that seemed to allow for perpetual motion. In recent years, we and other physicists have been applying the same insights to cosmology and fundamental physics: the nature of black holes, the find-scale structure of spacetime, the behavior of cosmic dark energy, the ultimate laws of nature. The universe is not just a giant computer; it is a giant quantum computer. As physicist Paola Zizzi of the University of Padova says, "It from qubit."
AND
To calculate the total memory capacity of conventional matter, such as atoms, one can apply the standard methods of statistical mechanics and cosmology. Matter can embody the most information when it is converted to energetic, massless particles, such as neutrinos or photons, whose entropy density is proportional to the cube of their temperature. The energy density of the particles (which determines the number of operations they can perform) goes as the fourth power of their temperature. Therefore, the total number of bits is just the number of operations raised to the three-fourths power. For the whole universe, that amounts to 10e92 bits. If the particles contain some internal structure, the number of bits might be somewhat higher. These bits flip faster than they intercommunicate, so the conventional matter is a highly parallel computer, like the ultimate laptop and unlike the black hole.
note: the black hole is said to process like a serial computer
AND
What is the universe computing? As far as we can tell, it is not producing a single answer to a single question, like the giant Deep Thought computer in the science-fiction classic The Hitchhiker's Guide to the Galaxy. Instead the universe is computing itself. Powered by Standard Model software, the universe computes quantum fields, chemicals, bacteria, human beings, stars, and galaxies. As it computes, it maps out its own spacetime geometry to the ultimate precision allowed by the laws of physics Computation is existance.