I was using a nightmare set for Benjamin Breeg Eddie for a while, which seemed pretty effective since he has AOE and multi-turn attacks, and none of his attacks wake sleeping enemies. I've switched it out for Immortality, but Beast Eddie also looks promising (though I haven't tried it yet). I bet they'd work really well on a hellhound since those things sleep enemies like half the time already, so putting nightmares on them would make it all but guaranteed. I've also played with the idea of using them on gunner Child of the Damned or sentinel Harpy.