Uh, this is actually a pretty good idea, if you could implement it. It would have to filter out background noise, and would be tough to make it work in a crowd, but it seems like a decent aid, at least for those who are lucid enough to understand that they have a disorder.

As SoftwareMaven explains below, many schizophrenics experience visual hallucinations in addition to aural hallucinations, but this doesn't seem like a huge stumbling block.

Bigger, I think, is the paranoia aspect. If you really, truly believe the plants in and outside your house are vampires who are waiting to kill you (true story, unfortunately) I can't imagine you're going to put too much faith into your wristband.

Auditory aren't the only types of hallucinations. It isn't hard to imagine a hallucination that includes sound and a visual on the band.

Having somebody close to me who is affected by schizophrenia, I am hopeful that new, different treatments can help. The worst part is the lack of objective measure of reality for the suffer. It can be horribly frightening for them.