This is something I read about and tried with my little guy when he was just about two and couldn't fall asleep on his own. I started with naptime and it washed over to his bed time automatically.
I couldnt' bear to let my guy cry for so long alone but had a similar issue - when he woke up every night, multiple times a night, either my husband or I needed to go into the room and rock him back to sleep and sneak out. God forbid the door would wake him up or he stand up screaming and the process would start over.
We established a naptime routine. (you could do the same at bedtime) Diaper change, music, 2 books and a sippy. I also read to incorporate a "lovie" which turned out to be sleepy bear - some stuffed animal or blanket that you always include in the routine. We'd change his diaper, turn on his lullaby CD, read the two books while he has his sippy and we cuddle with his lovie, then rock for one more song and I'd tell him - ok it's tiem for your nap now. I'm going to put you in your crib so you can fall asleep." Then I would sit down on the floor next to his crib and let him cry it out - never saying anythign more, just pretending to sleep, maybe occiasionally patting his bum or back. the first time I did this, I sat there for over an hour, he eventually passed out and fell asleep. that was absolute torture by the way...The next time, I moved just a little farther away, then the next time, across the room, then near the door, then in the doorway. Within 10 days I was putting him in his crib saying "ok, it's time for your nap now. I'm goign to put you in your crib so you can fall asleep," and extign the room. by 2 weeks he didnt' cry at all. The positive effects miracously bled over into his night time routine and to his middle of the night wakings. hope it helps!