This theory contends that the interior of the universe is simply a replication of the information on its outer surface. And since the three-dimensional (okay, four-dimensional but let’s keep this simple) interior can hold much more data than the two-dimensional surface, the internal information has a granularity, sort of like what happens when you expand a bitmap image. It sounds pretty bizarre, but there are mathematical and experimental results that may back it up. The “blurring” threshold is believed to be about 10-16 meters, which is measurable by existing equipment.
Update: The New Scientist has gone to a paywall. Ars Technica has an article that explains this concept.