Quite a torture device. Though I like it, I have to play devil's advocate and ask: why all the scary dreams? If you've already got someone caught in a metal box with multiple sets of claws, why bother with the added torture of nightmares?
I guess what I'm saying is, I like the concept, but I'd like to see a little more with the background.
An interesting idea and a vicious torture device. When you truly want your enemy to suffer.
A conceivable variation might be to allow an outsider to share in the vision in order to gather intelligence. How better to get to know your enemy than to see how he reacts in a sandbox?
Corran could have just gone outside and used the woods, and I bet he would have too had his wife not been ashamed or embaressed that her husband was squatting in the reeds like a dog. I guess the moral of this story is that you can't please you wife all of the time and to attempt it is to raise the monkey's paw.
Poop jokes. toilet humor, a lament for the married man and unconvential magic items. You cover a lot here sir. Well done.
Funny and fun, a good reminder not all magical inventions turn out for the best or wind up cherished by their creators.
Adding in a curse to have it always return to the person it was recently given to until they can successfully give it away to someone who will accept the gift would be a fun addition. (After it's true nature is known the poor sod owning it will have to haul it about to a far off town or land to properly dispose of it, leading to more then a few fun adventures especially if he has to hire the characters to protect him during the travels..)
This would also make a wedding great gift to any lovely couple from a jealous suitor who lost out.
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A fun item to toss in with goblin treasure as well for the greedy adventures to get their paws on (especially with the aforementioned curse suggestion.