I thought the episode was great.
I still get chills when Beverly sees all the corpses sit up, and it turns out to be a hallucination.
The concept of blocking REM sleep was pretty cool, since naturally it's near impossible to stop it in a normally functioning brain (people that have tried staying awake with stimulants usually get to 3-4 days before the body just doesn't care and goes to REM sleep no matter what)
The only fail was Troi's huge ass sticking out like a sore thumb in the flying scenes. Her pear shaped body sure doesn't help this. I think they should have tried different angles or even a different way of suspending her in mid-air.
Other than that (and the mysterious aliens staying mysterious) the whole episode was pretty cool.