I have very realistic dreams. Unfortunately, when I say realistic, I don't mean "it seemed so real, it was like I was really flying!" Instead, it is more like, "I dreamed that my receptionist told me she is Israeli." (She is actually Israeli.) It is usually quite easy for me to remember my dreams. Sometimes they are so realistic that I get them confused with what has happened during my waking life.
I often deal with stress by dreaming about the situation that is getting to me. Before exams, I dreamed about sitting down, writing out the answers, and getting the exam back with a big red "A" on top. Sadly, upon waking, I would realize that I hadn't yet taken the exam. The same thing happens at work before a big event or meeting. I hate those dreams.
Once in awhile I will dream about something impossible. But even the impossible things are still "real." I saw my dog again once. She died in 2001, and it was heartbreaking to wake up and realize she wasn't actually back.
Rarely I will have nightmares. They usually involve lots of running and hiding, not killing or scary bugs or anything like that. Once someone tried to run me over; another time, I was running from a floating mask.
Once I tried writing down my dreams in some kind of journal. It started getting depressing when I saw that I had very little fantasy life! My boss told me that she dreamed about her dog. One day, her dog turned to her and said, "Why don't you let me free? It is so horrible to be in this collar and leash all the time. I never get to do what I want!" I have never had a talking animal in any dream (except maybe my dad's bird, who talks in real life). But on the whole, I will try to consider that my real life is satisfying enough. I don't need to have crazy dreams!