A research team from UCLA has developed a brain-machine interface that can record high-level brain activity and display images that have been thought about by a person. By connecting the activities of individual neurons with specific images and making the neurons light up when a participant thinks about one of the images in the study, the brain-machine interface attached to the neurons was able to bring the image to a computer screen.
While researchers have already been using such interfaces to reconstruct human memories on a computer, this particular study is exciting as it may pave the way for developing a system that could record dreams, allow the handicapped to communicate and provide a way to control technology with our minds.
source: http://www.psfk.com/2010/10/future-brain-machine-interfaces-may-record-and-playback-our-dreams.html