I have a feeling that this discussion is getting confusing because we haven’t really pinned down what kind of simplicity we are talking about. It seems to me that Donald Norman (and most of the responses) are talking about “feature simplicity”. You also have “usage simplicity”.
“Feature simplicity” refers to keeping the number of different features a product offers down to a minimum. This keeps menus nice and tidy; and since there are less features, there are less things to mess up, so it’s easier for the designer to be sure they have done a good job at designing the user experience.
“Usage simplicity” is something different. This is a “perceived” simplicity, i.e. how much simpler it makes your life. There might be a hell of a lot of complexity going on back stage to provide this. Consider auto-focus in cameras. It adds to the number of features, but at the same time it makes your life easier. Also consider Gracenote’s CD track identification service that is integrated into iTunes. You stick a CD in, it automatically looks up the names of the tracks online and shows the names. A lot of users probably don’t realize this is happening but still enjoy its benefits.
It’s important we don’t confuse the two. It interests me that this is exactly the kind of point that Donald Norman would normally make, but chose not to in his recent essay.