Why not just an iPhone app: tie the phone to your wrist and let the accelerometer record the movements. Would it drain the battery, or is the iPhone too heavy?
We have an app just like this, but haven't released it because a lot of people expressed concerns about not being able to charge their phone at night as well as breaking their phone. The WakeMate is a much better user experience in terms of comfort and convenience.
The "Sleep Cycle" iPhone app works by placing the iPhone next to your pillow. I never got it to work reliably, even though the motion detector is sensitive enough.