I figure it's best to explain the basic mechanics of the technology used to create this video before anything else. An understanding of the machine is necessary in realizing the significance of the video and circumstances presented further on.
Part of the machine is attached to the subject's head. Special goggles are placed over the eyes. Vibration sensors (known generally around the lab as TTs - Tremor Trackers) were placed at strategical places on the subject's face. Wires were inserted into the neck, arms, and shoulders.
The subject was given a sedative designed so as not to too heavily affect the stages of sleep. Once the machine detected the subject entering the rapid eye movement phase of sleep, we initiated its reading process. The machine studies subtle fluctuations in brain activity, slight facial movements, blood flow, eye movement, and, most importantly, brain waves. The machine uses the information from this and converts it to a video/audio presentation (though I was unable to obtain a copy of the video with audio).
The machine bases its conversion on information collected from a massive number of volunteers. The volunteers were asked to wear an early and lightweight prototype of the reader part of the machine while imagining and viewing various images (both abstract and reality-based), as well as listening to a large library of sounds. The type of information these readers collected from the volunteers' brain activity and the like was manually correlated with what the volunteer was viewing, imagining, or listening to at the time of processing.
The correlations recorded with the aide of the volunteers was used to create a database usable for "translations". The machine was programmed to read the subject's various stats and, using the information gleaned from the volunteers, hopefully create an accurate approximation of what the subconscious was imagining. This program was not able to completely replicate the happenings of the subconscious and is dependent on basic shapes, shades, and pitches. This explains why the imagery in the video seems rather primitive - like something from the eyes of a creature with strange and poor vision.