A system and method for applying electrical stimulation or drug infusion to nervous tissue of a patient to treat epilepsy, movement disorders, and other indications uses at least one implantable system control unit (SCU) (110), including an implantable signal/pulse generator (IPG) and one or more electrodes (152, 152'). The IPG is implanted in the mastoid area (143) of the skull (140) and communicates with at least one external appliance (230), such as a Behind-the-Ear (BTE) unit (100). In a preferred embodiment, the system is capable of open- and closed-loop operation. In closed-loop operation, at least one SCU includes a sensor, and the sensed condition is used to adjust stimulation parameters.