Nice job!
I've always wanted to pursue something like this, but never found the time. Something that I wondered was whether by using a computer, headphones, and lights over the eyes - if the computer could somehow control or feed suggestions to the dreamer; in some manner using a computer to alter the dream-world thru suggestion in some manner (ie, lucid-dream virtual reality). Feedback from the REM movements would be necessary and needed, but you already have that...
What has always annoyed me most when lucid dreaming (the rare occasion it does occur to me; I rarely can remember on my own, so it is happenstance) is how easy it is to fall out of lucidity - if there were some way to both a) induce/remind the user for lucidity (which this machine can probably help) and b) keep the user in lucidity - dreaming would be a much more interesting (and potentially useful) experience...
Keep us updated on your progress, ok?
