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Sorry for such a vague question but I could have sworn I read somewhere that Hawking proposed the reason we might see a classically appearing universe is due to the possible role of black holes in quantum decoherence. Is there such an idea by him or another physicist? If so, can anyone point me to some names where I can read up on more?

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Not a bad question actually - I tweaked the title a bit for you ;-) As for your other question about black holes in centers of galaxies, that should be posted separately. But it would probably go better on Astronomy. –  David Z Apr 24 '12 at 16:15
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The idea that virtual quantum gravity will cause fundamental decoherence is due to Penrose, Hawking, and many other GR people in the 1960s. It was inspired by the idea that black holes can link up to other branches of GR solutions, and this behavior suggested that perhaps a new universe is created in the process of singularity formation in gravitational collapse. If so, then information from our universe can irreversibly go into another universe, leaving us with a decohered effective description.

Hawking in papers from the 1980s introduced the dollarsign matrix (the S-matrix, except with decoherence) to describe such things--- the idea was that pure-states evolve into mixed states.

The whole thing fell apart when AdS/CFT provided specific examples of unitary evolution which included black hole formation and evaporation. The principles of gravitational holography and black hole complementarity show that there is nothing exceptionally strange about black hole formation, that it respects the S-matrix principle, and in fact, this was an unstated implicit assumption in string theory (in hindsight) which demanded that there is a consistent S-matrix in a perturbation theory that later was shown to include gravity.

So it is now agreed that black holes don't lead to coherence loss, and that the quantum gravity processes are just as unitary as any other theory. So this idea is now ruled out.

If you want to read more about fundamental decoherence due to quantum gravity, you can read Roger Penrose's more speculative papers, or his popular books. It is certain today that this is not what nature does, but this insight took many decades and required holography, which is an even more radical revolution in physical law than fundamental decoherence.

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