What is that little divot on an M4 barrel that lies between the front sight and the muzzle?  

It looks like you're supposed to clamp something to it.  But without anything to clamp to it, it just looks wierd.

I'll be the first to get this one!

It's a step cut intended to mount the 40mm grenade launcher (M203). The reason it is on your civvie AR is mostly for novelty purposes - to have a true M4 profile bbl. Of course, you could argue that it reduces weight or that you might mount a 37mm flare launcher (looks like M203) or other accessory to it. (I think they make a 12GA adapter or something ???) Probably could even mount an M203 with the right permit/license....