Jon Hamilton tracks the progress of electrocorticography, or ECoG, electrodes on the surface of the brain which can detect electrical signals:
In one recent experiment, researchers were able to use ECoG to determine the word a person was imagining. "This is both very exciting and somewhat frightening at the same time," says Gerwin Schalk, a researcher who studies ECoG at the New York State Department of Health's Wadsworth Center in Albany. "It really goes pretty close to what people used to call mind reading."
So perhaps it's not surprising that Schalk's research is funded by both the National Institutes of Health and the U.S. Army.