Okay, on continuity in fiction, mostly. (But from my position as a fiction writer and therefore a seeker of plausibility more than of truth, it seems to be very much the same thing.) From an excellent essay from Todd Seavey:

And then, naturally, we have the highly efficient way that normal people [as opposed, in this essay, to geeks like ourselves —Ed.] reconcile continuity errors: ignoring them. I can see a certain sensibility in this approach, but somehow I have more admiration for people like my friend Ali Kokmen (who majored in Modern Culture and Media back in our Brown University days), who is so attentive to continuity issues that he once wrote a long, thoughtful e-mail to friends about apparent contradictions in a Muppet TV special featuring Elmo. (Elmo time-traveled into his own past yet did not encounter himself. Does that mean his past self was destroyed? Temporarily displaced? Fused with the Elmo from the present? Why do the writers seem unconcerned about the existential can of worms opened up by Elmo’s cavalier toying with the timestream?) Ali once said that he felt great pride, after years of telling his wife Michelle about DC Comics’ system of parallel timelines (Earth-1, Earth-2, etc.), when the two of them watched an episode of The Odd Couple together and Michelle, on realizing that the episode contained an explanation for Oscar and Felix’s first meeting that contradicted the explanation given in a previous episode, said that the newer episode must take place on “Earth-2.” Ali beamed, “My work here is done.”

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Update: See also this hilarious bit from John Holbo over at the Valve:

Extra bonus point question: compare and contrast the situation of classicists, with all these new Oxyrhynchus texts come to light, with the Episode 3 situation. In both cases the situation is technology and effects driven. The classicists use “multi-spectral imaging,” the Star Wars people rely on special image effects, too. Who is happier, fans or scholars?