My DS is 8 months old and we have been fortunate enough to crack the sleep issue, but I do find that every now and then he makes this kind of sobbing sound in his sleep :( It sounds like when you're a kid and you've been crying so much that you can't control your breathing. He doesn't usually wake when he does it, and it is usually at night, but I have known him to do it in the day.
It is absolutely heartbreaking and I always go and pick him up to give him a cuddle - even though he's asleep, I hope it will help him settle back down. It sounds like he's having a nightmare, but I have no idea whether babies can have bad dreams or not 
Has anyone else had any experience of this? I would really like to hear if he's not the only one!