Apparently, nightlights may lead to depression:
A study from Ohio State University Medical Center found that hamsters with chronic exposure to dim light at night showed signs of depression within just a few weeks: reduced physical activity compared with hamsters living in normal light-dark conditions, as well as less interest in sugar water (a treat for the hamsters), greater signs of distress when placed in water, and changes in the brain’s hippocampus that are similar to brain changes seen in depressed people.
The kids both sleep with a nightlight and I often wondered if the lights mess with their circadian rhythm. I know that our bodies respond to light and dark, essentially our bodies shutdown in the dark and come back in the light. So having a nightlight could conceivably put us in some kind of not-quite-asleep state.
Then again, the study involved hamsters.