Student response systems (“clickers”) are a fairly well known piece of technology these days. The basic idea is students have a small remote that they can respond to a question. The computer receives all the student responses and allows the lecturer to see how the class is doing. The gains and usefulness are fairly obvious and have been documented particularly by Dr. Eric Mazur at Harvard. You get instant feedback on how the students are doing allowing you to adapt your lectures on the fly. It engages the students by requiring them to work problems in class. Boston University uses Turning Technology, which seem to do the job and are relatively inexpensive.
I want to mention a way to employ clickers in the context of the Gutenberg method of teaching and forward based assessment. The Gutenberg method of teaching is very simply the idea that most textbooks are well written with plenty of examples and the students should be able to get a lot out of them. You teach your course with the idea that they know most of the material and the lecture becomes more of a discussion. While I think many teachers hope students read the text before coming to class, experience says that is not a given.
Forward based assessment is an assessment where you ask questions based on what the student should be prepared for not what was already covered. This encourages students to prepare the next thing as opposed to not being concerned about what is happening and only studying those topics that are past. Forward assessment also encourages a more active lectures as students come to class with new material on their mind. I implement forward based assessments by asking short (1-2 question) quizzes at the start of class based on information they should have read for that days lecture. I don’t expect students to master the material from their preparation, but I do expect somewhere around 15-30% understanding. Therefore the forward based quizzes are designed for this level of understanding. Forward based assessment helps implement a Gutenberg style of teaching.
The issue is that you are asking a quiz every day that has to be meaningful (i.e. graded). In a very small class this might not be an issue, though grading still takes time. Also in a small class you can more easily determine if the students are prepared for the days material. For large classrooms forward based assessment is challenging, but clickers can overcome this grading issue. Not only will the clicker software to all the grading for you, it provides you with instant feedback on the students preparation. Clickers allow a way to encourage students to prepare for class through the reading.