You are right. The gap between observer and object is vital. Usually there is a tendency to blur the distinction between the two, especially with thoughts and emotions. People will say "I am angry" or "I am sad" or "I am confused" and that is the actual experience - if you are identifying with a thought, an emotion, or a physical sensation then the gap is not there. Have you had a stomachache or a headache that you have taken medicine for, and the pain is still there, but somehow it seems farther away and you can't really care about it as much somehow? That is like what I mean by the gap ... you are here and the experience is over there, so it is not you really. At the same time you are aware of it and you can be aware of being aware of it. The content does not matter. It is about watching as you watch yourself. I wish I could remember the details of a study I read about. There is a section of the brain that responds when you develop this sort of awareness and it grows with use by forming new connections between the neurons. You are literally re-wiring your brain when you cultivate this ability, and the ability grows stronger as this re-wiring takes place. I think I read about it over on another forum (http://www.transparentcorp.com/community/forum/) because someone had posted a thread about the article. But to get to the point, I sort of borrowed from the Sedona Method. When you hold an object in your hand, you can blur the feeling of where your hand ends and the object begins by squeezing it tightly. After a while it can become difficult to let the object go. If you do get your hand to relax you can let go of the object by turning your hand over and letting it fall. There is another way to hold on to the object, though. You can let it rest on your hand, without squeezing it, so that when you want you can hold the object and when you want to let it go all you have to do is tilt your hand and it will roll off. It is possible to hold on to your thoughts and emotions in the same way, recognizing that you have them but they are not who you are, and that you can let them slide away at any time. What you have to keep working at is the tendency to grab the object again right away after you let it fall and put it back in your hand. You may have to let go many times before you can let it stay gone. You can let it go whether you have held it for twenty seconds or twenty years. Where I went with this was that I held objects in my hand - literally - because even though I would feel the object in my hand I would not be likely to mistake myself for something like a pen or pencil or stapler. I am not an office supply. It took a bit of practice before I got the idea of the observer, the observed, and the gap between the two. Being the watcher is about being present and watching in the gap. It is a step above the observer even and the experience is more continuous.

Labelling didn't work for me, either.