For the time being, we are building a device that measures skin conductivity and/or temperature and/or pulse.
This data will be pumped into a computer, and plotted over time.
Do this when you go to sleep, and bam, you have a recording of your sleep cycle responses, and should be able to see the various stages of your sleep including REM.
Then we change the computer program to detect REM while you're asleep, and to output a signal to either (1) power a vibration motor in your hand or (2) flash LED's in your eyes.
Learn to do a reality check when you feel a funny feeling in your hand, or see a funny pattern of light - and you're lucid

This is useful for:
1) Research of sleep, and lucid dreaming
2) Inducing lucid dreams

Eventually we hope to turn it into a wireless device - but we're not sure how yet.