The electrocardiogram (ECG) signal is used extensively as a low cost diagnostic tool to provide information concerning the heart's state of health. Accurate determination of the QRS complex, in particular, reliable detection of the R wave peak, is essential in computer based ECG analysis. ECG data from Physionet's Sleep-Apnea database were used to develop, test, and validate a robust heart rate variability (HRV) signal derivation algorithm. The HRV signal was derived from pre-processed ECG signals by developing an enhanced Hilbert transform (EHT) algorithm with built-in missing beat detection capability for reliable QRS detection. The performance of the EHT algorithm was then compared against that of a popular Hilbert transform-based (HT) QRS detection algorithm. Autoregressive (AR) modeling of the HRV power spectrum for both EHT- and HT-derived HRV signals was achieved and different parameters from their power spectra as well as approximate entropy were derived for comparison. Poincare plots were then used as a visualization tool to highlight the detection of the missing beats in the EHT method After validation of the EHT algorithm on ECG data from the Physionet, the algorithm was further tested and validated on a dataset obtained from children undergoing polysomnography for detection of sleep disordered breathing (SDB). Sensitive measures of accurate HRV signals were then derived to be used in detecting and diagnosing sleep disordered breathing in children. All signal processing algorithms were implemented in MATLAB. We present a description of the EHT algorithm and analyze pilot data for eight children undergoing nocturnal polysomnography. The pilot data demonstrated that the EHT method provides an accurate way of deriving the HRV signal and plays an important role in extraction of reliable measures to distinguish between periods of normal and sleep disordered breathing (SDB) in children.