Options for short range distance determination between two objects

This idea might be patented, so it might not be suitable for a commercial project, but you can actually measure the position and orientation of one electronic device relative to another, with reasonable accuracy, using magnetic fields. This is how Polhemus and Ascension trackers work. They are used in VR motion tracking, and in surgery for tracking the position of surgical instruments during operations.

The basic concept is to have one set of coils transmitting, and another receiving. The transmitter coils emit audio frequency alternating magnetic fields, and the receiver coils then measure the amplitude of the fields in the three receiver coils.

There is some code available online for doing these calculations. You might also take a look at the guy's project page: Open source electromagnetic trackers using OpenIGTLink.

This may not be quite the system you're looking for, as it's fairly complex, and is giving you much more info than you wanted. However, a simpler algorithm could be used which just gave you distance.

A company called Sixense make a gaming controller with a 6DOF sensor in it. I don't know how easy it would be to integrate this technology into your project though.

Update:

Now that I know what your application is, I have been thinking of a very similar application. My suggestion would be this:

Use the three orthogonal coils approach. Both the mother and child have a set of coils. The child would be the transmitter. Every few seconds, the child module would transmit an acoustic frequency magnetic field on each coil in turn. The mother module would measure the amplitude of the voltage induced in its coils. If the amplitude was too low, or if no signal was heard for more than a few seconds, then the alarm sounds.

You may consider to do this application with Bluetooth. The market is more the driving factor than the technology. Allow me to explain:

• BT will be cheaper and easier to implement
• Wireless is better in this app than the others (sound, light etc. variations) since child movement will not impact wireless' performance, all others are susceptible to motion of the child
• All phones come with BT so you eliminate a secondary device that parent needs to carry, the app on phone may add more value in ways I didn't think yet, but they are there.

In terms of technical implementation:

• I would build a BT device with controllable output power. Using SPP or something similar, I can program the desired output power and have some control over distance.

• Indoor and outdoor performance will vary a lot but you can use phone to find out if you are indoors (using GPS, or rather lack of it) and make necessary adjustments.

You need to make a lot of experiments to make this work 100% (even than in some cases it won't work well) but my hunch is it will be good enough.

TI has an IC (CC240 or something like that, please look at TI site) that supports BT low energy (BTLE) with 8 bit uC. With good programming and decent hardware design, you can make this the size of key fob (the ones banks uses) less than 10$. (It would not support BT, but BTLE), charged via USB and has a battery that works for a week.

I don't know your application but a device that can measure short distances accurately is an acoustic range finder such as the Maxbotics LV-MaxSonar-EZ family of devices. It provides both digital and analog outputs and can resolve down to one inch or so. It would require that one or both of the persons have the device on them, however.