a technique used in movies and videogames (especially fps, first-person-shooters) to make the game or movie seem much scarier than it is -- this effect is achieved by making the scene way darker than it needs to be, thus cloaking the presence and movement of monsters who are lurking in the background
sometimes bright, randomly flashing or sparking lights are added to sections of the scene to further heighten the tension
the use of nightmarevision in videogames began with Quake and continues on today... the recent movie Cloverfield used lots of nightmarevision which made certain scenes eerier and scarier, but also helped the director/editor hide the cuts and transitions in the supposedly single-shot pseudo-handheld video sequences... further scariness was achieved by switching from total darkness to nightvision in one scene, allowing the actors to see a little bit in the total dark, thus making nightvision a special form of nightmarevision
a similar concept to nightmarevision is spookyvision, first used on the tv show South Park for one of their Halloween specials... spookyvision uses the visage of Barbra Streisand, rather than darkness, to enhance the scariness of scenes
"Do you like that new fps you just got?"
"No. I couldn't set the gamma up high enough to see shit. Those asshole game writers kept the whole first level in nightmarevision, even when I got to the Boss. And it wasn't all that scary, the nightmarevision just made it hard to see or do anything. I'm like what the fuck? I think I just kissed off forty fuckin bucks."