As a father of triplets, now three, let me tell you that this thing is fantastic. More than anything else we have ever gotten for our children, this clock allows us to militarize their sleeping schedule.
When we put them down for a nap we put on the yellow light. This is both reassuring for them and lets them know they're not waking up from sleep (i.e. they don't think it's morning).
When we put them down for bed red light means it's time to be quiet and go to sleep. If the red light is on when they wake up they do not get out of bed for any reason other than potty or an emergency. Otherwise they go back to sleep.
We started using the clock when they were 16 months or so (give or take, they're three now and it's tough to remember that far back). What I do know is that in about two weeks they were hooked and, like clockwork, on our schedule rather than theirs.
When we put them down to sleep we always reinforce, "It's red light, time to be quiet and get some rest." It also makes it easier to discipline for loud behavior when the light is on, "What color is the light? Should you be talking or resting?"
This clock means more restful nights for you and a predictable time table. It allows you to get up and prepare snacks or whatever else you have to do for the day and know exactly when the kid(dies) are getting up. We bought two, one for each room. One broke and we replaced it, and we've since bought two more for when they visit their grandparents.
I can't imagine life without it.