Let's run through this. There are two major sequences that take place within dreams: The Dream-within-a-dream at the beginning and the Dream-within-a-dream-within-a-dream at the end. In the case of the former, the first level dream (with the revolutionaries outside the window) is supposed to mimic reality and make the subject believe they are in the real world. The second level dream (with the oriental palace on the cliff) is also supposed to be believable if just a bit stylized. Like this:
All of those lanterns on the ceiling make a great visual and is just over-the-top enough to denote a place in dreams (similar to Hollywood love scenes where the bedroom is absolutely riddled with lit candles and you wonder how long it took to light the damn things).
In the sequence that ends the film, you have three levels. The first level is again supposed to mimic reality. It's only when Cobb's subconscious interferes in the form of a train barreling down a downtown street that the spell is nearly broken (fortunately, the subject has a bag over his head at the time):
The second level is also supposed to mimic reality to a point, with the only dream-like imagery coming from the famous hallway fight sequence. Even in this case, the concept of rotating gravity is not just for the sake of being a dream, but rather is due to the dreamer being tossed around inside a rolling van in the first level (an explanation I just adore because it makes such lovely sense).
For the third level, all parties are aware they are in a dream, but they only get as fantastical as framing it as a James Bond action sequence on some snowbound fortress. It's a cool concept, but it failed in the execution because all that came out of it was some poorly choreographed action sequences where I didn't know who was who and what the hell was going on. Given this result, they might have just as well gone with something far more surreal. But even then, I'm willing to give it a pass.
There's a great joke in the movie Living in Oblivion about how movie dream sequences always include a dwarf when, in fact, dwarves aren't regularly remembered from actual dreams:
"Have you ever had a dream with a dwarf in it? Do you know anyone who's had a dream with a dwarf in it? No! I don't even have dreams with dwarves in them. The only place I've seen dwarves in dreams is in stupid movies like this! 'Oh make it weird, put a dwarf in it!'. Everyone will go 'Woah, this must be a fuckin' dream, there's a fuckin' dwarf in it!'. Well I'm sick of it! You can take this dream sequence and stick it up your ass!"
When I dream, I don't see purple polka-dotted rhinos or Richard Nixon on a unicycle dressed as an astronaut. I usually dream about myself in known places where the architecture has gotten skewed to add extra floors and absurd breezeways that connect buildings. In other words... much like the stuff we see in Inception.
The one area where Inception really dropped the ball was with the flashback dream sequence (wrap your mind around that one) that consists of Cobb and Mal in their own private paradise. Given that they control their surroundings, you'd think they'd skip the rows and rows of skyscrapers and go with some beautiful What Dreams May Come type of surroundings.
But who knows. Maybe Cobb and Mal are just City people at heart.
This all leads me to a movie coming out in March called Sucker Punch. Haven't heard of it yet? Here's the trailer:
So here we have five nubile young women creating a dream world of their own that includes, among other things, crumbling cathedrals, burning zeppelins, fire-breathing dragons, cyborg Nazis, futuristic cityscapes, WWI biplanes, killer robots and a big-ass samurai Mecha with a Gatling gun. Call my cynical, but this seems far less like a conceivable dream world of five institutionalized young women and more like director Zack Snyder throwing every flippin cool geek idea into one movie because anything goes in a dream sequence.
This is not to say this thing isn't going to be entertaining. I'm sure it'll be a hoot. But with Inception, Nolan created a storyline and plot that was engaging, and had some nice visuals to boot that served the story rather than distract from it. Sucker Punch looks very much like the visuals came first, and they serve not only to dazzle the audience, but to distract them from how thin all other aspects of the movie are.
And let me just end this piece with one last thought: BRRRRAAAAAWWWWRWRMMRMRMMM!!!