I actually liked the "dream" aspect of the movie. It's one of those "Craven" things that he has the knack of including in some of his movies. People think it's only something he did with NOES, but he's included similar dreams in some of his other movies(Deadly Friend, Serpent and the Rainbow). It's the classic prophecy-type "bad omen" thing that most of these dreams represent. Like in the original NOES when they comment how Tina having a bad dream might mean there was going to be an earthquake soon(which is actually played upon in New Nightmare). Jonathan's dreams showed his connection to his father. I liked that. I just didn't like that his powers were awakened because he ran head-long into a goal post(LOL!). I would've made it that Jonathan was somehow born with those abilities, which he never really realized what they were for the most part, and wrote them off as being just simple nightmares. Until he dreams about his family's murder, and then gets the phone call that they we REALLY murdered. Maybe deal with a bit of Jonathan going crazy over this, and not knowing what to believe, which would add to the sub-plot later on in the movie of the police suspect HIM of the murders.
Though, I wouldn't leave in the whole "power of love/magical necklace" thing. It was kinda stupid. Why did it have powers, anyway? Because Alison made it powerful with her love? LOL! I would've defeated Pinker differently. Maybe, since they make it a point that when he's entered the television/electronic world, he's bound by it's rules, do something where Pinker gets trapped in a room with television sets that are all looped to each other, after he enters(from an outside power source, Jonathan's friends close the loop and Jonathan has to break all the tv screens. Pinker comes out of one of the sets and tries to stop Jonathan, but with each set that's broken, Pinker looses power, until they're left with the last one, which Jonathan breaks, defeating Pinker. Of course, a sequel could happen, if that set ever gets repaired.
Have a better, more charismatic actor for Jonathan Parker.
Tone down the comedy and cheese.
Have some of the characters acting more freaked-out.
Go further with some of the ideas.