The sleep and wake behavior of Lion in many respects differs substantially from that of Snow Leopard. Most notably, a sleeping display can no longer be woken up by moving the mouse, an emulated key stroke (via f.ex. VNC) or the Apple® Remote. You now need to press a key on your keyboard or a button on your mouse or trackpad.
These changes make a lot of sense in environments where no remote controls are used: in these, it's now a lot harder to power the display back up by accident. You also usually won't need or want to power up a distant display that you most likely can't see when you access your Mac® via screen sharing software.
For users of remote controls, however, these changes can really be a show stopper. Especially for HTPC users, who may want to save power, but don't want to connect a mouse or keyboard to their Mac® just to wake up their displays.
Naturally, we got a lot of emails on this topic (btw: thanks to everybody for their great feedback!). But with the traditional ways of waking up a sleeping display (generating "system activity", posting mouse and keyboard events, ..) no longer working under Lion, we couldn't offer a solution right away.
So we studied Lion's source code to get the complete picture. What we learned pretty fast is that the change in behavior (as described in the first paragraph) is not a bug. In fact, several comments in Lion's source code strongly suggest this is a feature. This also makes sense to some extent (as described in the second paragraph).
By now, we've found three ways to wake sleeping displays from an application: one using private API and requiring root privileges, one using public API and requiring a kernel extension - and, after reading through a lot of kernel source code - one using only public API and requiring neither root privileges nor a kernel extension.
Naturally, we picked the third one for inclusion in Remote Buddy. The new version 1.18.1 now wakes sleeping displays whenever you press a button on your remote. It also addresses other Lion-specific issues that you've reported to us.
P.S.: The 5 year celebration promo is still running, but will end in only 3 days. Don't miss this opportunity to save 20% - and don't forget to tell your Mac®-owning friends! Thanks!