Typically used with Psyche.
In short: dis illusions. While Clairvoyance is about seeing or feeling things on a supernatural level, Lucidity is about seeing through things which do not exist at all: illusions. Phenomena that doctor the input to your five senses call for a Lucidity check to determine if the character will experience things as they actually are and not as they were altered to be.
None of this is real… or is it? Sometimes it's tough to tell. You can make a Lucidity check to realize you're dreaming or hallucinating. There are numerous conditions that could induce hallucinations: deep sleep, extreme stress, disease, poison, psychoactive substances, and being plain old nuts.
Realizing you're dreaming may not be so hard when you're under the covers at home, but it's way tougher when you're deeply sedated. The more powerful the reason for the hallucinations, the higher the DL to see through them.
If you meet or exceed the DL, you realize it's make believe. If you fail the check, you keep right on deluding yourself. The GM should offer up additional chances to come to your senses any time the hallucination requires you to further suspend your disbelief. For instance, if you're having a conversation with a hallucination, and the bartender keeps insisting there's no one sitting next to you, that's a good time for another roll.
Many illusory spells can be defeated with a Lucidity check, for instance Diversion and Shadow Puppet. In this case, you may add any points in Magic Defense to this roll. The mage makes a Casting Roll. You make a Lucidity check. If your result meets or exceeds the Casting Roll, you elude the effects of the spell.
Note that you must first be aware of the illusion in order to see beyond it. If there's an illusory dog bark that you doesn't hear in the first place, there's no grounds for disproving it.