Part of the reason that consciousness is so difficult to talk about is that the word itself is so ambiguous. As described by Australian philosopher David Chalmers, consciousness includes, among many other things, the following phemonema:

• the ability to discriminate, categorize, and react to environmental stimuli;
• the integration of information by a cognitive system;
• the reportability of mental states;
• the ability of a system to access its own internal states;
• the focus of attention;
• the deliberate control of behavior;
• the difference between wakefulness and sleep.

So when I'm talking about consciousness as the experience of self awareness, that slippery interface between intellect and sensation, I find that my words have somehow come to mean one of these other phenomena, and then I lose or forgot the point that I was trying to make - the fist slips out from the hand.

Maybe it's best to stick to the Sankrit. The Sankrit word for consciousness is vijnana, literally, the knowledge that results from conceptual separation. This is opposed to sanjna, derived from san (together) and jna (to know), thus refering to the knowledge that comes from conceptual combinations. Sanjna is usually translated as "perception." People usually don't think of "perception" as the opposite of "consciousness," but that is the way the Buddha looked at it.

Sanjna perception is not mere sensaton, but rather the framework that allows us to objectify or subjectify our experience. Sanjna perception supplies the means that allow us to manipulate our sensations and thus see what we want to see and ignore what we don't. It is the knowledge that comes from combining our sensory sensations with our memories of what is pleasant and what is unpleasant.

We can come to understand vijnana consciousness, then, as the opposite - the knowledge that comes from separation. Considering this aspect of separation, vijnana is sometimes translated as "discrimination." Consciousness in this regard is then that aspect of the mind that says, "This is me," and "That is not me" - "I am this" and "I am not that."

I once heard Alan Watts describe consciousness as a sort of radar. It probably evolved in sentient beings early on to protect them from predators. Those ancient trilobites slogging through the primordial mud that had no consciousness would make no effort to protect themselves in the face of danger, for they did not perceive any difference between themselves and the primordial mud (or the predator for that matter). On the other hand, those self-aware trilobites that had consciousness would flee at the first sign of danger, and pass on their conscious DNA to the next generation of trilobites.

I'm sure consciousness evolved well before trilobites, but I find it easier to identify with trilobites, than say, sand worms. Plus I didn't have any good pictures of sand worms.

The trouble, Watts pointed out, is that when we identify with our radar system, of course we’re going to feel like we’re constantly under attack. It seems to me that paranoia is nothing more than overamplified consciousness, vijnana on steroids if you will.

So the idea that consciousness is somehow the self, "ego" or even the "soul," is actually just an illusion based on the way vijnana works. Just as we trick ourselves with sanjna into ignoring evidence right in front of our eyes when we want to believe the contrary, vijnana tricks us into believing that we actually are its conceptual separation.