Indeed. The Tibetans claim that this is all a dream, and that the only way to confirm this for yourself is to wake up. Until then, because all of the internal dynamics follow rather precise and well-defined laws (i.e., correlations), it is easy to be fooled into thinking that it is real and external. In actuality, it is all made of "your" mind, in the same way that a dream environment is made of "your" mind. "Your" is in quotes because it is not the mind of the dream character, but of the dreamer. Ultimately the character discovers that the two are the same, by introspecting precisely.

Just some random brainstorming inspired by this post: If you imagined a layer above reality in the chain of dream->reality->x, what qualities would describe it? People often differentiate dreams and reality by the fact that reality follows rigid rules instead of having subjectively-bent rules. Would the rules of x be even rigid-er? Maybe you follow the pattern by subtracting the rest of the subjectiveness left in reality. Reality still has subjective qualities: we're all bound to an arbitrary viewpoint, and things like the Anthropic Principle affect the circumstances that we experience. I guess that basically means some "objective" total view of reality would be the higher layer, but that doesn't really leave any room for actions or cognition as we know it, so it's just a fun thought.

Who did the people who wrote that up think they were talking to?

Argh. Buddhist philosophy is ususally horribly written (in the west). Much easier to come to grips with this idea if we start from the much more commonly agreed that our sense perceptions and memory are generally sufficient for survival, but very much inexact in comparison to the reality of what is perceived and remembered.

Add to this, a very strong insistence that everything is in a perpetual state of flux, that there is no perpetual "you" or "me" (or indeed anything). Trivial physical example - a molecule in your body is exhaled, and now inhaled by me... (cue "we are all one..."). A part of the earth turns into a banana plant, you eat the banana, and the banana turns into a human being. Now where are the boundaries of "you" and "the Earth"? See first paragraph reminding you about the very limited nature of your sense perceptions and memories.

The foregoing is stuff "we all know" but push into the background while we "get on with real life", but the yogic/Buddhist approach asks us to foreground it, and ask ourselves how we would conceive of and live life with those understandings in the foreground. Further, what if dynamics beyond those limited senses were at play? Psychology and ethics which takes the above as a starting point, rather than exisiting power relations, ends up looking different from what we have now.

I wish I could do this justice in one post.

The whole thing is like a snake swallowing its own tail. If what "they" are saying is correct, then this is "my" dream. The Buddha is a character I dreamed up to remind me how to wake up.

Why isn't this solipsism? First, because it's not my personal dream (the person being a character himself). Second, for a similar reason as MWI is not solipsism. This branch really is my own branch (in a particular sense). What I experience as other people are really "my versions" of them, but this does not mean there aren't other perspectives analogous to mine.

This idealist perspective can be made internally consistent. At that point, deciding between it and materialism may seem like a matter of preference. The difference is that the idealist perspective can be confirmed, in the same way that a nighttime dream can be: you discover, very precisely, how you constructed the whole thing, including all the tricks you used to blind yourself to the ruse.

Okay, but if you thought it was all your dream, why would you write up that belief in a presumed attempt to communicate the same idea to another figment of your imagination?

In a dream, it's possible to gain and lose lucidity repeatedly, and in varying degrees. In the "breaks," one concocts all kinds of nonsensical strategies to regain it. I suppose one of mine is arguing with others about the nature of consciousness and its relationship to QM. In the best case, other people catch on and contribute missing pieces of the puzzle, which alleviates remaining doubts that were dissuading me from pursuing it in earnest.

Others in the dream? Something about reality being a shared dream. Which sounds a lot like a simulation to me.

The main difference is that if this is your dream, you can discover the mechanism by which you create it. In a simulation, that mechanism is external to you.