Hurkyl said:

Accepting for the sake of argument it requires a hierarchy of superobservers, I really don't see why such a thing should be nonsensical.
I could easily imagine an argument that in reality that such a hierarchy would contain much more information than is accessible to us, but that's a rather normal state of affairs for physical theories, rather than being nonsense.
Let the first order observer observe a single particle, and for k>1, let the k-th order observer observe the (k-1)-st order observer.
We first fix the situation von Neumann is talking about: ideal measurements that put the system instantaneously into a well-defined eigenstate, hence measure a complete set of observables of the system.
An observer (together with the observing equipment) must therefore be much larger than the object it observes, since it must have essentially classical pointer readings for each particular observable in the complete set. If the observed system consists of n quantum particles, it has 3n continuous quantum degrees of freedom. hence the observer must have 3n classical pointers, each comprising at least N atoms, where for a reasonable accuracy, N>>100. Therefore the observer consists of a system consisting of n particles consists of at least 300n particles. But this is an extremely conservative estimate, since we ignore all the logistics that is necessary to make such complete measurements with some reliability.
The k-th order observer of a single particle (n=1) therefore contains at least 300^k particles. Assuming the number of particles in the universe to be U, we see that the existence of the k-th observer implies
[tex]k\le log U/log 300 < 33[/tex]
when U=10^81. Even allowing lots of unknown dark matter will not change the resulting upper bound by much.
The only escape to this argument is to assume that the number of particles is infinite.
But even then there appear to be unsurmountable problems with the k-th observer measuring all details approximately instantaneously, given that the single particle observed by the lowest order observer is on the Earth and we know quite well the distribution of particles close enough to the Earth to be able to neglect relativistic delays.