When my oldest ( 6 ) was 3 years old, he became afraid of Huxley in "The Adventures of Elmo in Grouchland". He watched that movie over and over and over and over and over and over and over again. My poor mother cringed when I recently took the movie to her house when she was babysitting the oldest and youngest.
Anywho .... nightly we had to go into the room and tell the mosters to get out, go home, go away. It was a ritual. He also required the light on in his room.
I didn't make a big deal out of it. I would turn off the light after he was asleep when I was on my way to bed. He isn't scared of Huxley anymore, he just outgrew it, but he still sleeps w/ the light on. No biggie.