Daytime fears bring Nighttime nightmares

Every child has bad dreams from time to time, nightmares we call them.  Some are mild and others are strong.  Some children have them more frequently and worse than others.  The important thing is to speak openly to our child(ren) about them and try to understand what triggers them.  With listening and understanding we can make it better, if only for a little while.
By looking at my 8 year old son you would have no idea that he suffers "chronically" from nightmares.  He has a strong, stubborn personality.  A tough exterior.  Maybe the nightmares have made this a coping mechanism.  I'm not a psychologist, so I don't know.  He is also outgoing and friendly.  I'm glad for these characteristics.  I worry that the nightmares will turn him into a quiet, sullen child.  At this time he saves those mood only for me. It's a blessing and a curse. Especially on mornings after long nights of tossing, turning, moaning and crying.  Sometimes he sleeps through the moaning and crying, though it can appear he's awake.  Other times he is awake...wide eyed and terrified.
As a toddler he had what is called night terrors.  These are very strong dreams where the child screams, cries, shakes uncontrollably.  They can be as stiff as a board with their eyes wide open with terror.  I never got use to them.  Never wake a child from these.  I would attempt to carefully guide him back to bed if he was out of it.  I would rub his back and whisper to him softly.  Eventually, after what seems like hours, he would calm and fall back to sleep.  He's slowly grown out of the worst of these.  Those seemed to be more like faceless fears, if that makes sense.  His nightmares seem cyclic almost.  The fears always seem to be simmering under the surface and something will bring them back to the forefront of his mind and it's off and running.  In November (thru late January) of 2009 it was the movie "Home Alone" that set them off.  He had seen the movie numerous times before with no negative reactions.  Seeing it that time though brought everything on.  It started when he was afraid to go upstairs.  He was sure someone was in his room with a gun.  The nights following that we're rough.  Crying before bedtime and nights riddled with nightmares from the moment his eyes closed until the wee hours of the morning.  Then, they slowly subsided.  Before and since then, some of his fears are: someone breaking in, guns, ghosts, monsters (this one I think is resolved) and fire (major house fire in our community on Christmas 2010) to name the main ones.  Oddly enough, he is not afraid of the dark.  Though sometimes shadows will effect him.
All kids have fear.  I realize this.  But these constant fears are gripping and squeezing the life out of him.  It effects not only how he sleeps but how he functions the next day.  So far, his nighttime fears are not obvious to the outside world.  By this I mean, he contains it to home.  I think it would really effect his mental state more if he had problems while he was in school or socializing with friends.  I want to do what's best for him and I don't know what that is.  I've read that some people say that you should acknowledge to the child that it's ok to be afraid and determine ways to handle it.  That approach makes the most sense to me and it's how I've been proceeding.  Others say that parents should be firm that there are no such thing as ghosts and to basically tell the child to suck it up.  I just can't do this one.  I feel that would just weaken his fragile mental state at this point. Am I wrong?  It's so hard to know what the right thing is for a child.  Especially since he is not 4 years old.  He can vocalize more of his fears but being older makes it harder in many ways.  I don't want to provide him with a crutch but I do want him to become strong mentally/emotionally and accept his fears.
One major stumbling block right now is my husband.  I feel he doesn't understand that our sons fears are concrete, real to him.  I patiently try to talk to Jacob about what is going on in his dreams and to brainstorm ways for him to cope.  Realistically, they are not just going to go away because we're willing it away.  I do have nights and mornings where I am cranky and do not handle it properly.  Those times I deeply regret because I know it's not his fault.  My husband does not take the same approach as me and I worry that this could be doing more harm than good to my son. Sometimes he is patient and understanding and I cheer.  But most times he just repeatedly tells our son that his dreams are not real, they can't hurt him and he'll then play on the fear.  This makes my son cry.  I'm sure it makes him very uncomfortable and self conscious.   i.e. the other night my son didn't want to go upstairs to get ready for bed because he was afraid of ghosts being up there.  We both rationally tried to tell him that it was ok and that his sister was already up in bed.  He still refused to go up alone.  My husband said he would go up with him.  Then said, I'll meet you up there.  That, to no surprise, didn't fly. Don't say you'll go up with him and then say you'll meet him.  It's not the same.  So, hubby went up before him and then right before son got to the stairs there's hubby at the top of the stairs with a dark blanket wrapped around him and a Storm Troopers helmet on.  Way to scare the kid more.  Sometimes, he'll even call him a sissy or a girl.  I guess he thinks it's all in good fun and that it'll toughen our son up. I feel it whittles away self confidence.  We've gotten into many disagreements on how to handle this.  It saddens me that he is too stubborn to see the potential damage he is causing with his actions.
We've been struggling with this for years now.  I don't know what to do.  Is it "normal" for 8 year olds to have constant nightmares?  I just don't know.  I would love to take him to a therapist but our health insurance, like many Americans, is horrible.  We have to meet a $3500 individual deductible before they will cover anything.  My heart is breaking and I don't know where to turn.