The argument goes something like this. If we assume that future technology could eventually produce a computer powerful enough to run any simulation, no matter how complex, then people could end up running simulations of their ancestors. And the number of virtual ancestors would have to be greater than the number of real ancestors. There would be no way for a simulated ancestor to know whether their world was real or virtual, but one incontrovertible fact would be that if there are so many more virtual than real ancestors, then the probability that you yourself are virtual instead of real would be close to certainty.
Tierney's article describes this a little more clearly, and I encourage everyone to take a look. But even though Bostrom puts a new spin on the idea, it's not really a new one. Tierney mentions the movie "The Matrix," of course, but the idea is even older than that.
I remember reading a short story in the book "The Mind's I" edited by Douglas Hofstadter on this very subject. (My copy is in storage, but using the Internet I've just discovered a copy in my local library, so I'll check it out this afternoon.) In the short story, written from the first person, a computer scientist describes an experiment he's performing. He's created a simulated world inside a computer, and in that box "people" who appear to display self-awareness are born, grow old, and die. The scientist notes with amusement that these simulated people have begun to speculate about his existence, some believing in a creator, and others professing atheism. The believers think that there is a "heaven" and a "hell" afterlife, and the scientist considers the possibility of setting up two more computer boxes connected to the original. The believers would have their program transferred to the "heaven" box after they "die," and the rest would go to "hell." He doesn't end up doing it, but the speculation is still there.
The story fascinated me. If we did live in a simulated world, would there be a way for us to figure it out? In the end, I decided that this was fun to speculate about, and it might lead to stories and philosophical discussion...but in the end, it's like the argument about free will versus determinism. Even if I believed in determinism, as far as I can see, the world works in a way that I can't help but act as if I have free will. And so it goes.
As for the kosher food...an article in today's Times, "For Kosher Emergencies, Manna From a Machine" by Kim Severson, notes that a company has begun selling kosher food via vending machine. Hopefully these machines will sweep the country any day now.