Heard of it? I had them when I was a kid, a very frightening experience. I was a little older than your coworker's son, I was around 7 or 8 when I had them. The best way I can describe them to you is having a nightmare while you are awake. Imagine being fully awake, but seeing things that you know cannot really occur. The thing is, you aren't really awake, you are only partly awake while the rest of your mind still sleeps and creates these illusions. I know this sounds all freaky and weird, but its very difficult to explain what you see. The one that I remember the best is sitting up in my bed and seeing the window getting bigger and bigger, and then opening like a mouth. Not a very easy thing to handle for a 7 year old, let alone a 2 year old who has no real grounds of reality at this point.
Something usually initiates the night terrors, like for me they would occur when I got overheated during the nights if I had too many blankets on. Its a very odd occurance, and something that really isnt understood quite yet since it seems to be different for everyone. Going though them is very scary, but usually I wouldnt remember EXACTLY what happened the following morning and wouldnt remember being woken up by my parents in the middle of having them.