OK, Teddy is obviously Jiminy Cricket. Wise and not wanting to be human (doesnt have as many smart arse quips though).
David BECOMES human, when he gets the hate on the other David back at water world head office. Killing the robot (which he feels he is not), what could be more human? Eliminate the "other".
Perhaps that is what the uber mechs are wanting, an authentic human existence coloured by the actual history/actual emotions, rather than there twee "disney-mo-co" type similcrums.
+1 for loop reality, I never got why they didn't just simulate it for him internally.
And yes I thought that it was a pastiche of moods and styles, that were to hard to reconcile, I'm glad that you guys identified for me the Kubrickien observational concept though.
P.S. I loved this movie at the cinema, but my wife (who doesnt read hard SF) hated it. I think she felt emotionaly manipulated. But I had the existential torment goin on!
P.P.S It is obvious that Speilberg just knew that he would have to revisit this and tack on a new ending (ala' CE3K aliens inside mother ship), so he just did it on the 1st draft instead!