Kate,
I was REALLY worried about elminating it with Claire as you know. Stacy gave me some good advice, she basically just said, "go for it, it won't be that bad."
I think it is a good thing to get rid of it because of two reasons. For one, it probably isn't good for his teeth to have milk proteins on them all night and two he doesn't really need it.
I was sad as well because our whole routine seemed to change and I missed the cuddling.

We cuddle now, however, we just do it while we read. Claire still has water in her sippy before bed.
This is what we did. We did the water down thing because we weaned it just after a year and I was terrified that she still needed those calories. I certainly didn't want any hunger waking. I don't think at Marshalls age you would have this problem. So...we put the watered down version in a sippy and she didn't like it at all. It took two nights of pu/pd and then things were much better. We then switched the milk/water to only water in a sippy. We now get our water and pick our books to read, climb on the couch read and kiss and bed. We let her have the soft top nuby sippy for a while and then just switched to a regular one. It was honestly not as bad as I had imagined...although sometimes I wish we were still bf

so she would just cuddle a little more.
Good luck and let me know what your doctor says because I am always interested to hear the differences in opinion.
Myia