I'm sorry, but almost everything that Another (and most of the rest of you, for that matter) has said in this thread is false. As in, the opposite of true. He was correct about the observable universe being finite in size and, suprisingly enough, the bits (pardon the pun) in his second post about everything in the universe being entangled with everything else, but that was about it.
Quantum mechanics does not mean that "particles cannot exist in precisely defined states", it means that particles do not exist. The universe is made out of amplitude configurations, not particles and waves. The uncertainty principle results from position and momentum being the same measurement on a quantum level, not from there being some sort of laplacian demon that prevents scientists from observing the position and momentum of a "particle" simultaneously.
Now, that doesn't mean that you can compute the universe on your computer. As a consequence of the incompleteness theorem, it is not possible to simulate a computer simulating itself and, thus, you would either have to model a universe other than your own, or create an imprecise model of your own universe that had a great big blank spot on your output where the computer is and constantly increasing errors rippling outwards from this noncomputable blank spot.
Similarly, Eagleon's reply that uncertainty "looks alot like a compression algorithm" is just plain wrong. Current models of physics predict that no data is being "deleted" anywhere in the universe itself, nor filled in and nothing even remotely similar is happening. So, while it is possible that we are living in a simulation and the Dark Lords of Beyond the Matrix are constantly futzing with the code our universe is made from, we have no idea if that is the case and, in principle, have no way of ever finding out if they wanted to prevent it.
I'm not going to attempt to tackle alway's post about simulating "energy layers" and nesting simulations together to simulate a universe with physics that allow for better simulations than the top level universe can output, since, so far as I can tell, it is almost pure gibberish from the standpoint of information theory and QM.
Another's third post, claiming that we are in a simulation, while more coherent, is still not true. It stretches the meaning of "simulation" to the point where the term ceases to mean anything close to the common english meaning, or any technical use of the word that I am aware of. An object is not a simulation of itself. It is definately not an infinately nested simulation of itself. It is itself, nothing more, nothing less.
tl;dr version: Grek nerdrages about people misapplying quantum physics and information theory. While the universe is only noncomputable if you insist on using a bad model of the universe, there is absolutely no reason to assume or even hypothosize that we live in a simulation of any sort.
As to the original questions, "If we are living in a simulation, what are we?" and "What happens if the simulation halts?", the answers are quite simple: "'You' are a subset of the amplitude configuration that is the universe, existing and changing from second to second based on the laws of physics, as defined by the arbitrary rules laid out in the simulation." and "We cease to continue to exist.", respectively.