Do we need to understand consciousness to understand physics? I used to answer "yes", thinking that we could never figure out the elusive "theory of everything" for our external physical reality without first understanding the distorting mental lens through which we perceive it.
After all, physical reality has turned out to be very different from how it seems, and I feel that most of our notions about it have turned out to be illusions. The world looks like it has three primary colors, but that number three tells us nothing about the world out there, merely something about our senses: that our retina has three kinds of cone cells. The world looks like it has impenetrably solid and stationary objects, but all except a quadrillionth of the volume of a rock is empty space between particles in restless schizophrenic vibration. The world feels like a three-dimensional stage where events unfold over time, but Einstein's work suggests that change is an illusion, time being merely the fourth dimension of an unchanging space-time that just is, never created and never destroyed, containing our cosmic history like a DVD contains a movie. The quantum world feels random, but Everett's work suggests that randomness too is an illusion, being simply the way our minds feel when cloned into diverging parallel universes.
The ultimate triumph of physics would be to start with a mathematical description of the world from the "bird's eye view" of a mathematician studying the equations (which are ideally simple enough to fit on her T-shirt) and to derive from them the "frog's eye view" of the world, the way her mind subjectively perceives it. However, there is also a third and intermediate "consensus view" of the world. From your subjectively perceived frog perspective, the world turns upside down when you stand on your head and disappears when you close your eyes, yet you subconsciously interpret your sensory inputs as though there is an external reality that is independent of your orientation, your location and your state of mind. It is striking that although this third view involves both censorship (like rejecting dreams), interpolation (as between eye-blinks) and extrapolation (like attributing existence to unseen cities) of your frog's eye view, independent observers nonetheless appear to share this consensus view. Although the frog's eye view looks black-and-white to a cat, iridescent to a bird seeing four primary colors, and still more different to a bee seeing polarized light, a bat using sonar, a blind person with keener touch and hearing, or the latest robotic vacuum cleaner, all agree on whether the door is open.
This reconstructed consensus view of the world that humans, cats, aliens and future robots would all agree on is not free from some of the above-mentioned shared illusions. However, it is by definition free from illusions that are unique to biological minds, and therefore decouples from the issue of how our human consciousness works. This is why I've changed my mind: although understanding the detailed nature of human consciousness is a fascinating challenge in its own right, it is notnecessary for a fundamental theory of physics, which need "only" derive the consensus view from its equations.
In other words, what Douglas Adams called "the ultimate question of life, the universe and everything" splits cleanly into two parts that can be tackled separately: the challenge for physics is deriving the consensus view from the bird's eye view, and the challenge for cognitive science is to derive the frog's eye view from the consensus view. These are two great challenges for the third millennium. They are each daunting in their own right, and I'm relieved that we need not solve them simultaneously.