There is a need to develop unobtrusive methods for long-term monitoring of sleep/wake and circadian activity patterns in the elderly both in nursing homes and at home settings as sleep is important for health and well-being. The IST Vivago WristCare is an active social alarm system, which provides continuous telemetric monitoring of the user's activity. We examined how the activity signal measured by IST Vivago differed between demented and non-demented subjects living in a nursing home, and how it correlated with the subjective assessment of sleep quality and daytime alertness. The activity signal data together with subjective assessments of sleep quality and daytime vigilance were collected from 42 volunteers (aged 56-97 years; 23 demented and 19 non-demented) for at least 10 days. The demented subjects had lower daytime activity and higher nocturnal activity than the non-demented subjects. Correlations between the activity parameters and self-assessments were weak but statistically significant. We also found correlation between functional ability and diurnal activity. The results are in line with previous studies with demented and non-demented elderly subjects and suggest that the IST Vivago system provides a valid instrument for unobtrusive continuous long-term monitoring of the circadian rhythm and sleep/wake patterns in the elderly.