Sucking is a very strong, normal developmental need in infants, babies, toddlers, preschoolers, and beyond. This makes sense biologically, as human babies (looking at us as just another warm-blooded, furry mammal) are born needing to suck in order to bring in the mother's milk, maintain/increase supply, and survive into childhood. So, biologically speaking, sucking is very beneficial to the survival of our species! Did you know that studies have shown:
"The minimum predicted age for a natural age of weaning [from the breast] in humans is 2.5 years, with a maximum of 7.0 years." (from http://www.kathydettwyler.org/detwean.html )
So sucking? Extremely normal, natural, evolutionarily quite smart. I'm *not* advocating pacifier use for 7 yrs of course, and you already know of the dental problems that can arise w/ long term use (likely preschool age and older, though most important would be to watch your child's dental development for any problems). ;) Interestingly enough, breastfeeding well into toddlerhood and beyond has actually been shown to be *beneficial* to optimal dental and jaw (thus, speech) development.
Anyway, there is no single right answer here - it's always best to follow your child's signs, and you know him best! It sounds to me like his current pacifier use is *so minimal* (for sleep only) that I personally wouldn't be in a rush to encourage weaning from it. If I were in your shoes, I'd probably continue the pacifier use on a month-to-month basis, with *extremely gradual* weaning in mind, allowing for things like illness, major developmental leaps, etc. so that an accompanying increase in pacifier use would not feel alarming (keeping the bigger picture in mind, 2 steps forward and 1 back, as is often the case w/ my own kids).
Hope that makes sense... Congrats on making it through that first year of motherhood - isn't it a wild and wonderful ride? :)