Party of Death author Ramesh Ponnuru graciously weighs in with an important clarification:

I agree with George and Smith about the definitional question, and with Bethell and those two about the ethical question.

You quote a passage from Gina Kolata's story in the New York Times, which does indeed sound alarming for those of us who believe in the sanctity of human life: Yamanaka "completed the ultimate test to show that the resulting stem cells could become any type of mouse cell. He used them to create new mice."

The wording here is a little tricky. My understanding is that what Yamananka did was to inject his mouse iPS [induced pluripotent stem] cells into a mouse embryo to see if they would end up playing a role in the formation of all of the various organs of the developed mouse. That's how he demonstrated that his cells were pluripotent, and that's the sense in which he "used them to create new mice." But he didn't use them to create a new embryo. Again, he injected them into an existing embryo.

Which completely answers my #1 argument vs. Smith and my #2 argument vs. George. Thank you, Mr. Ponnuru!

And it also shows the pluripotent stem cells acting more like body parts than like an organism or organisms, which behavior is illuminating -- and somewhat reassuring to me, though I'd still very much like to hear more about why we're sure that the still-living, brain-inclusive parts of disaggregated embryos (or their induced pluripotent stem cell equivalents) can't be be distorted organisms, rather than body parts.