The general consensus among researchers is that, as your muscles begin to slack and go into a restful state just as you are falling asleep; your brain senses these relaxation signals and misinterprets them, thinking you are falling down.
http://www.byedr.com/Other/870-2-general-3.html
This explains why I sometimes dream of falling off a cliff, or down some stairs and then all of a sudden I jump and wake up.
Weird feeling, but still awesome.
How about you?