the first half of the movie is diane selwyn's dream. she dreams of being a hollywood star or great actor (or both if she can be). she is optimistic, beautiful, and classy (like grace kelly). she gets an 'in' with her aunt and is discovered immediately. literally given a shot at a big film in her first attempt. everything seems to be perfect for ole betty. then there is rita who she falls in love with. rita has amnesia... betty can almost form her into what she desires. Their adventure of solving a mystery seems to be some kind of fake movie story (well... uhh... sounds a lot like this film i just got done watching). their match seems to be one made in hollywood.
then she wakes up. she is no longer betty, she is diane selwyn. rita is camilla rhodes. she is a former lover of diane's but diane would like to remove the former as she is tormented by camilla. camilla is actually getting married to her director adam keshur, which only hurts diane more. she finally hires some dirtbag to kill camilla. they meet at ole winkies, where the name betty becomes concious (its the waitresses name). also she is given the blue key = blue box from the dream. other people in her dream world come to play. coco is there but instead of being her landlady she is adam's mother. diane's aunt is actually dead, not in canada doing a shoot. she left diane some money; no aparent lead. in fact.... most people seem more real around her in the second half. characters like coco, the cowboy, and even the creepy wheel chair guy seem unreal in the dream half but are either realistic or not apparent in the reality segment.
taking a deeper look at adam in this scenario...in her dream, adam is completely tormented and torn apart. he is stripped of control over his film, his career is stolen from him, his wife cheats on him (with billy ray cyrus and his delicious mullet!), and he is reduced to begging a cowboy (in la!) for his life back. when betty sees adam (in her dreams) and runs from him, because conciously he poses as a threat to her reality. she denies it by escaping him in her dream. in real life, he torments her by tearing away her love. also, camilla rhodes is someone else in the first half (not rita; see the picture of her) and therefore has no connection with adam; making diane's dream "safe".
and the little blue box? it is very dreamlike representation of a key... a very abstract object. it is directly related to the blue key left by the murderer of camilla rhodes. maybe a trigger in her dream for her to wake up. as she gets closer to opening it, she begins to wake up.