My thoughts on Widmore's nightmares are similar to the way we have seen Hurley and Jack suffer.
Hurley is haunted by Charlie and Jack by Christian, both likely as a result of their leaving the Island. This would mean that Widmore has been on the Island at some point (not unimmaginable seeing as he see's the Island as His) and maybe he is recieving visits from one of the Island 'spirits'.
I think the Island appears in the different forms (Yemi, Charlie, Christain) dependant on how the recepient would feel 'drawn' to the character - for instance Eko was drawn to Yemi due to his guilt, Jack maybe the same with Christian and Hurley seemed to get on better with Charlie than anyone else (although in an Ideal world maybe Libby should have paid him a visit, in fact maybe she does in a future (or past???) scene in the mental institute).
So my feelings are that Widmore has had similar visits from an Island 'ghost', thus giving him nightmares. It may explain how he knew Ben would visit him, Charlie told Hurley that someone would visit Jack, maybe Widmore's visitor told him to expect a visit from Ben?