Quantum Entanglement - What's the big deal?

Bearing in mind I am a layman - with no background in physics - please could someone explain what the "big deal" is with quantum entanglement?

I used to think I understood it - that 2 particles, say a light-year apart spatially, could affect each other physically, instantly. Here I would understand the "big deal".

On further reading I've come to understand (maybe incorrectly) that the spatially separated particles may not affect each other, but in knowing one's properties you can infer the other's.

If that it the case, I don't see what the big deal is... 2 things have some properties set in correlation to each other at the point of entanglement, they are separated, measured, and found to have these properties...?

What am I missing? Is it that the particles properties are in an "un-set" state, and only when measured do they get set? (i.e. the wave-function collapses). If this is true - why do we think this instead of the more intuitive thought that the properties were set at an earlier time?

Answer

I understand your confusion, but here's why people often feel that quantum entanglement is rather strange. Let's first consider the following statement you make:

2 things have some properties set in correlation to each other at the point of entanglement, they are separated, measured, and found to have these properties

A classical (non-quantum) version of this statement would go something like this. Imagine that you take two marbles and paint one of them black, and one of them white. Then, you put each in its own opaque box and to send the white marble to Los Angeles, and the black marble to New York. Next, you arrange for person L in Los Angeles and person N in New York to open each box at precisely 5:00 PM and record the color of the ball in his box. If you tell each of person L and person N how you have prepared the marbles, then they will know that when they open their respective boxes, there will be a 50% chance of having a white marble, and a 50% chance of having a black marble, but they don't know which is in the box until they make the measurement. Moreover, once they see what color they have, they know instantaneously what the other person must have measured because of the way the system of marbles was initially prepared.

However, because you painted the marbles, you know with certainty that person L will have the white marble, and person N will have the black marble.

In the case of quantum entanglement, the state preparation procedure is analogous. Instead of marbles, we imagine having electrons which have two possible spin states which we will call "up" denoted $|1\rangle$ and "down" denoted $|0\rangle$. We imagine preparing a two-electron system in such a way that the state $|\psi\rangle$ of the composite system is in what's called a superposition of the states "up-down" and "down-up" by which I mean $$ |\psi\rangle = \frac{1}{\sqrt 2}|1\rangle|0\rangle + \frac{1}{\sqrt{2}}|0\rangle|1\rangle $$ All this mathematical expression means is that if we were to make a measurement of the spin state of the composite system, then there is a 50% probability of finding electron A in the spin up state and electron B in the spin down state and a 50% probability of finding the reverse.

Now me imagine sending electron $A$ to Los Angeles and electron B to New York, and we tell people in Los Angeles and New York to measure and record the spin state of his electron at the same time and to record his measurement, just as in the case of the marbles. Then, just as in the case of the marbles, these observers will only know the probability (50%) of finding either a spin up or a spin down electron after the measurement. In addition, because of the state preparation procedure, the observers can be sure of what the other observer will record once he makes his own observation, but there is a crucial difference between this case and the marbles.

In electron case, even the person who prepared the state will not know what the outcome of the measurement will be. In fact, no one can know with certainty what the outcome will be; there is an inherent probabilistic nature to the outcome of the measurement that is built into the state of the system. It's not as though there is someone who can have some hidden knowledge, like in the case of the marbles, about what the spin states of the electrons "actually" are.

Given this fact, I think most people find it strange that once one observer makes his measurement, he knows with certainty what the other observer will measure. In the case of the marbles, there's no analogous strangeness because each marble was either white or black, and certainly no communication was necessary for each observed to know what the other would see upon measurement. But in the case of the electrons, there is a sort of intrinsic probability to the nature of the state of the electron. The electron truly has not "decided" on a state until right when the measurement happens, so how is it possible that the electrons always "choose" to be in opposite states given that they didn't make this "decision" right until the moment of measurement. How will they "know" what the other electron picked? Strangely enough, they do, in fact, somehow "know."

Addendum. Certainly, as Lubos points out in his comment, there is nothing actually physically paradoxical or contradictory in entanglement, and it is just a form of correlation, but I personally think it's fair to call it a "strange" or "unintuitive" form of correlation.

IMPORTANT DISCLAIMER I put a lot of things in quotes because I wanted to convey the intuition behind the strangeness of entanglement by using analogies; these descriptions are not meant to be scientifically precise. In particular, any anthropomorphisations of electrons should be taken with a large grain of conceptual salt.