The basic plot of the film is based on a physiological phenomenon known as "lucid dreaming". Lucid dreaming means dreaming while knowing that you are dreaming. The term was coined by Frederik van Eeden who used the word "lucid" in the sense of mental clarity. Many of the dream state idiosyncrasies described in the film, such as the inability to read time on a digital watch or the tendency of light switches to malfunction, are described in studies authored by Dr. Stephen LaBerge of Stanford University, the leading American authority on lucid dreaming.
The man in the car shouting through the loudspeaker is Alex Jones who has a public television and radio talk show in Austin, Texas, as well as a shortwave radio show, where he expresses similar and even sometimes harsher viewpoints.
Another clip from the Monkey's lecture film shows Kurt Cobain in concert spinning his guitar over his head and throwing it into an amplifier. This was taken from the documentary he conceived in 1993 called "Live, Tonight, Sold Out".
Several scenes (e.g., the automobile with the loudspeakers on top) are similar to those in Slacker (1990), which was also filmed by Richard Linklater, using some of the same actors. Several of the locations in Austin, TX were also featured in Slacker (1991).
The pinball machine in the last scene is a Bally Fireball from 1971. In the film, the brand name "Bally" has been changed to "Rally", and while the name "Fireball" appears in some shots, in others it is changed to something else. The game is also shown in the film with 5 digit score displays while the real game has 4 digit displays. The Player 2 and Player 3 scores are both shown with a score of 11111, which means the player is playing a 3 or 4 player game all by himself and has a very unlikely score, or the machine in the dream is broken. Also, any real pinball machine with 5-digit scoring would have the rightmost digit fixed at "0".
A section of a Hubert Selby (author of Requiem for a Dream, Last Exit to Brooklyn) book entitled The Room is used in Waking Life, in the part where a red-faced man (played by Charles Gunning) in a jail cell describes in vivid detail the abuse he intends to inflict once he is released.