Cyclops is the "electronic referee" at the tennis tournament at the All England Lawn Tennis Club in Wimbledon, London.
Tennis is a game with a formally laid out court, with balls having to land inside the lines. And there are line judges all around the court to watch for where the balls land. (A top level match has one umpire, and then at each end of the court, a judge on the centre service line, a judge on the baseline and 3 judges on the 3 "vertical" lines). If any part of the ball touches the line, the ball is good - it has to be totally outside the line to be ruled out.
Most of the time, the judges can fairly easily see what's going on. But with the fastest servers serving at speeds approaching 140 mph, it's not so easy. Bring on Cyclops to monitor the service line, deciding if serves are in or out.
The system resembles a burglar alarm, with beams of infrared light directed just beyond the line. When the ball interrupts the beam - as it must if the serve is long by a small margin - an alarm goes off. This produces an audible beep. Of course, the line judge still has to be paying attention as the Cyclops only detects balls that are just out. A serve which is a long way out will miss the beam of the device altogether, and will be called manually.
The electronic eye derives its name from the mythological Greek race of one eyed giants and was invented by Bill Carlton of Malta. It was first introduced to Wimbledon in 1980 and now is used in many other major tennis tournaments around the world, including the US Open.
rootbeer277 asks "any idea how the cyclops tells the difference between a ball, a foot, and a tennis racket?" I think it doesn't, any time its beam is interrupted, it beeps. But it's on the centre service line (ie nowhere near where any players stand during a serve, they're usually just inside or just outside the baseline), and the operator (ie the line judge) turns it off immediately after the serve and then back on before the next point. It does very occasionally go off in the middle of a rally, in which case a let is usually played (the point is replayed) as the loud beep can be distracting.
In more recent years, there's a second detection system in use at Wimbledon. If a serve clips the net, but goes in, a first serve is called and the point is replayed. In the past, there was a judge who kept a finger on the net cord, feeling if this happened. However, apart from being inaccurate, this judge was the most likely to get hit by a high speed tennis ball!
Nowdays, there is a vibration sensor attached to the net which produces a beep (significantly higher pitched than the beep from Cyclops). The Umpire then calls the first serve.
Sources: Me having been to Wimbledon, and the Wimbledon tournament website for some of the details (eg the inventor and the exact date).
BlueDragon says "re cyclops : new systems, Hawkeye and Auto-ref are being trialled - they will track all the lines, not just the service line. Tennis wont be the same without the thrill of seeing a line judge having to throw themselves out of the way of a speeding ball ;)". Hawkeye tracks the path of a ball and can produce a virtual reality 3d model of where it landed, making it possible for the commentators to judge if a call was correct. Whether it will replace the line judges, or (more likely) be used to help decide close calls, like the 3rd umpire in cricket remains to be seen.
Update, July 2009: Cyclops has now been removed from Wimbledon. For the past couple of years, Hawkeye is fully installed on Centre and No 1 Court, and, as of 2009, the new No 2 Court as well. Line judges still provide the "primary call", but the players can request a challenge on any call using Hawkeye. They are allowed 3 incorrect challenges per set.