Dennis Coates has an interesting post on why we dream (here). As he describes, "Ive done a lot of reading about the brain and personality as a part of my research for MindFrames, and over the years I've revisited the scientific literature on dreaming a number of times."
My bottom line is that scientists still don't know why we dream. There have been a lot of theories, some of them over 100 years old, but none of them have been validated by research.
My preferred theory about why we dream, based on some of the new findings in sleep research, a separate area of inquiry. When asked why we sleep, researchers have much to say, but its mostly descriptive. Theyve identified three stages of sleep, in which EEGs show low-frequency brain waves, accompanied by reduced muscle tone, heart rate and breathing. These three stages are believed to be preparatory stages, after which the brain switches into a fourth, much deeper stage of sleep, which is marked by high-frequency brain waves, and practically no muscle tone. This is known as REM (rapid-eye-movement) sleep, which lasts 30-45 minutes and begins again in cycles of 90-120 minutes. Subjects report dreams five times as often in this fourth stage.
The most plausible explanation for why we sleep is that when the brain is active during waking hours, brain cell metabolism produces chemical byproducts. These need to be cleared out and replaced on a regular basis or they accumulate and get in the way of normal neurotransmitter activity, causing the sensation of being "mentally tired." Without mental rest (sleep), the brain would have difficulty functioning. This process is similar to what happens during "muscle fatigue." Prolonged use of a muscle area creates the waste byproducts of exercise metabolism, causing the sensation of need for physical rest, which gives the body time to remove these byproducts.
Moreover, the whole body requires rest in order to regenerate. The autonomic nervous system consists of two subsystems: sympathetic and parasympathetic. Both cannot be active at the same time; when one predominates, the other is switched off. When were active and coping with challenges and stressful situations, we're using our sympathetic nervous system. In this state, the human organism uses up energy. When we're calm and passive, the parasympathetic nervous system kicks in, so that the body can repair and restore itself. During rest, the immune system builds itself back up again. Without rest, we heal more slowly and are more vulnerable to disease. The importance of sleep, then, is that it forces this mental and physical inactivity upon us.
The above describes what happens, but it doesnt explain why people dream. Freud believed that dreams were the experience of the unconscious, a repository for sexual and violent urges too raw to be dealt with consciously. Another long-standing theory is that dreams are how people sort through and integrate daily experience. I've also heard some say that dreams occur because the creative part of ourselves needs to be free to express itself, which it can't do adequately while we're awake. But these are all unproven speculations."
What do dreams mean to you?