That looks familiar! They're called Gunsons 'colourtune'

I bought one of these sets about 10 years ago but have replaced it once about 4 years ago. They're great to get fine tuning because you can actually see whats going in the combustion chamber through the top of the 'glass' window in the spark plug. I have used it on every thing from my datos to my DT200(2 STROKE) and a few mates cars from HQ's to the missus's ford laser, very versitile bit of kit! it's great for tuning twin carbies(the reason why i bought it in the first place) espeically when used in conjunction with a gunson's carbalancer (flow meter). You'll notice that the black tube in the picture is used for hard to see spots it acts as a reflector, a periscope if you will. It also comes with a chart that shows what colour the 'flame' the combustion should be so you can get the fine tuning spot on.

This is their website, they are available in austrailia at any good performance shop.I bought mine in newcastle from PITCREW, a performance shop in wickham.

Ok, since you're the first person I have spoken to that has used it, I will ask you a million questions.

First thing heat rating of a plug, we all know that the heat rating of a plug can make a huge difference on the combustion. How does this "tool" compensate for the fact that I have 3 expensive platinum plugs in the other 3 cylinders, and that it will most probably not light the mix the same way they do?

Secondly, how can one use it, meaning can it only be used at idling, or can you use it on a dyno while your running the motor at any decent kind of speed? I wouldn't contemplate using it in my turbo motor, for fear of distruction, both it and my motor...

I ask these questions, because it seems that it's a great tool for the odd tuning job on a low power carraige, and not because I'm trying to dis it...

I'm pretty sure all it does is simulates a standard plug and not a fancy plug, however i have iridium plugs in my 1000, which is a A14 turbo, and it tuned it just fine, i think it's not about the spark its about the mix of fuel and air that goes into the chamber, it shows the colour of the cumbustion at idle and up to 2000RPM and 4000RPM.

So to answer your questions-
1) Probably best used with conventional plugs but i don't think it matters that much, i always thought that the platinum plugs are benifical because they last longer then the conventional plugs, and they don't really effect the way the way that the plug sparks and ignites the fuel and air mix inside the combustion chamber, however i could be wrong. In summary it doesn't compensate for the fact that you have platinum plugs, i think its used as indication to actually see what is happening inside your combustion chamber.
2)I only use it as the motor is idleing, you rev the car to 2000Rpm and observe the colour of the combustion back down to idle, and adjust the carby accordingly and then observe the colour when you rev it to 4000Rpm. There is a chart that they supply with the kit that shows the right combustion colour all the way through the rev range.I think its a good tool for tuning, probably not intended for turbo motors although i give my A14 turbo a quick tune with it, it really is intended for NA engines,Works extremely well with twin carbis when used in conjunction with the Carbalancer, which measures the air flow that a carby sucks. Never used it on a fuel injected car just on carby feed cars and bikes.
When i did a quick tune on the A14 turbo i didn't hit boost just went to 2000Rpm and tuned it so it idled properly, there no substitute for a run on the dyno!

I once got one of these "see thru" caps on a JDM L18sss crate motor.

Also, a friend of mine had a set of JDM "Dr. Frankenstein" plug wire inserts that showed a 4" visible arc.
He used to drive his car around without a hood (bonnet), and it was pretty cool to see at night.

I used this cap & the matching rotor in my 1200 ute when my GX engine was in it for a year. It suddenly ceased to function while driving to work one morning, about 10 miles out of Goulburn [Australia's first inland city]
It wasn't hard to diagnose. The spark had found a way to get to the distributor shaft from under the brass strip on the button, straight through the plastic. I hitched a ride to town, picked up a new [non transparent] replacement & was back in action again within the hour.
I continued to use the cap for years without incident, but carried a servicable "used" one in the glovebox after that.