It seems we are on the same page here. Thanks a lot for the links MrMyth, I will find them helpful too.
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Riastlin , consider giving your players each a couple of encounter and one daily power. Ideally print them out as cards. Say 1) Allows a PC to create a nothingness, so make a doorway or a pit or 2) Allows a PC to summon terrain, either a wall, difficult or damaging terrian. By having these as set abilities with mechanics, such as Blast 5, range 20 etc they know where they stand.
The daily power could be a summons, allowing you to either summon an item or a companion for one encounter. So you could summon up a kickass sword, or one of the party's NPC companions, but only for one fight. I would make the companions be insubstantial, but they disappear at their bloodied value. They are not really here. They could also summon mounts. I would let them summon a random nightmare too. A powerful creature they have no control over. Heck, that is always fun in an encounter.
Have you read any H.P.Lovecraft? When Cthulu dreams, he summons horrors beyond imagining. Maybe they are caught in the dream of a slumbering immortal being. It could be as alien or as understandable as you wish.
For extra GM-credit, have scenes and scenery that allow the players to work out who's dream they are caught in. Their ownly ways out are to A) Beat up the manifestation of the dreamer until they are near death, that will wake them up with a start or B) Solve whatever is making them have a nightmare.
E.g. A semi-divine epic paladin is dreaming of the damsel in distress that he could never save. Although he is amazingly powerful, he will always fail at everything he does in this dream, just like he did in real life. Therefore, the only way to end the nightmare is to save the Damsel in distress for him and bring her there so he can see.
If your group are RP-heavy. You might be able to pick a PC with massive unresolved issues, the players can only leave the nightmare when they have resolved their issues. See paladin example, save their lost love, get a message warning of the Eladrin city being attacked by drow to the mayor in time (when in reality they failed to do so and everyone died)...
Oooh that just gave me an idea. What if there is a warning that a friendly dream-spirit/psion wants to give to someone? The Epic Psion is in the Prime Material plane and finds that the Drow are about to launch a sneak attack on the Eladrin. There is absolutely no way to get there in time to warn them. He astral projects, finds the first group of heroes he can, he drags them into the dream world and tells them to travel via the Dream world to find the Lord of Myth-Renden (or whatever city you want). They need to fight their way there and deliver the message of warning to the sleeping/trancing lord. Very little time passes in the dreamworld in comparison to the real world. They have X amount of time to get there.
On the way they fight past all sorts of random dream nasties, are ambushed by projections and summoning from Drow oracles have have picked up that something is wrong (and therefore move the invasion plan forward), and finally, with the time ticking down, they find that the Lord of Mythrenden is no slouch, he has severe protection against astral/dream assault. They must fight/talk their way past his dream-guards to make it to his office/bedchamber and tell him. I would make it damn hard to talk their way through, or make it too time consuming, when things are at a rush.
Anyway, sorry for rambling, that is just a random adventure that suddenly sprung to mind.