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Hi Dreamtimer,
Simulation suggests that living things are somehow not entirely real, that we are convincing reproductions. It's a great metaphor--but my perception is that the reality is more organic. We live in a vast organic neural network that can dream in solid objects and organic living beings.
Silicon based simulations are a very good way of describing it and they do a good job of imitating the dream state, particularly the collective dream state--but they are not the actual dream state.
Oh, one more thought. Other intelligences who are more adept in the mental realm can definitely tweak the collective or individual consciousness, creating all kinds of bizarre situations, phenomena, interfere with our own individual dreams. This is likely what freaks out governments. They may be on to this with regards how it relates to alien intelligence and have no way, currently, of getting a leg up on it.
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