An outside observer is really a bit of a oxymoron. If you note the experiment, the observer has only access to photons related to the other system. It is not actually able to perceive the system itself. So they are doing this via second order logic. The observer cannot, therefore, actually observe time within the system. Basically, it can only infer a the universe as existing in a quantum system. The photons provide the vector, I think.
I suggest you have a bit of a look at self organising systems, sci.
Auriga, I would suggest you look at some of the associated research I mentioned in the other thread.
The implication on 'life' (from associated theoretical research) is that it is merely one form of consciousness, which, in itself, is a requisite quantum function of collapsing probability fields in order to produce time. For example; without an observer, Schrodinger's cat will never resolve as live or dead.