This idea is often repeated (even in this thread). It sounds good, but I still haven't the slightest iota of an idea how you get from recursive strange-loopy self reflection to the experienced sensory field (sometimes "qualia"). I don't see how this idea, or anything else, gets you one tiny fraction of the way to consciousness, unless you take it as an axiom (i.e. "when you point such a network at itself in such a way, voila! you get realtime first-person subjective qualia-tastic experience"). And why should we?
See my other comment in this thread. Basically, I hold that “how some experience feels like” (qualia) is just another perceptual input into our thought process, and that there’s really nothing particularly mysterious about it. If you accept that qualia is representable in the brain, then it shouldn’t be surprising that it informs the cognitive process. It’s almost a tautology. If you disagree that this could explain your inner experience, you’d have to elaborate on what precisely is not being explained.
I personally believe that what a real explanation of subjective experience will come down to is some kind of recursivity. The brain perceives parts of its own processing. To make a loose analogy, a bit similar to a debugger or profiler observing its own execution.