Working on a sleep project, and I am quite stuck, feedback would be awesome.

My first suspicion from looking at the images is you are picking up something from the keyboard or touchpad scanning. Try moving your hardware away from there. I know they do measure eye movement with electrodes like you are doing - I have sleep apnea and have had to have several "sleep studies" where they wire you up with about 20 wires (heart rate, breathing, eye movement etc.) and then have you sleep the night away - in the morning they review the data and will show you where REM was etc. One thing you might want to check out is the gel electrodes they use for stuff like that. I suspect there is a fair amount of DSP and other filtering that goes on to get rid of ambient noise too.