I've never experienced them myself, but have spoken to people who have, or have kids who have had them and made me really interested in what they are all about. I was doing a little research so I'll share what I found!
Here's what one woman who handles www.nightterrors.org said about handling them:
"Many people have written me to disagree, but I have found the best
method of controlling someone during a night terror is to hug and
reassure them and tell them that everything is all right. Agree with
what they are saying and doing. Sometimes it is not possible to hug
them. Don't try to force physical contact. DO NOT yell at them or tell
them they are only dreaming as this seems to only upset them even more.
Move objects that can injure the person out of the way. This method
seems to work better in children rather than in adults. (Adults are a
little more physical) The most important thing to remember is that
someone having a night terror does not know what they are doing. Make
sure that there is not anything nearby that they can hurt themselves or
others with. It is perfectly safe to wake someone who is having a Night
Terror. Please be gentle! "
Heres some more advice!
For children who get frequent night terrors, it might help to wake your
child up before the time that he usually has a night terror. This is
thought to interrupt or alter the sleep cycle and prevent night terrors
from occuring (it also works for sleepwalking).
Hope this helps!