Good advice (not mixing alcohol and sleeping meds. EVER), though unfortunately most morons never heed it, and sometimes have to deal with the consequences of their idiocy.
Personal soapbox, but I feel alcohol should simply be unavailable on airplanes. Period.
This is some great advice from phuketbound - why don't you try that, by booking yourself on a couple of short commuter or shuttle flights (kinda like a good excuse to go sightseeing as well), and essentially force yourself to experience a successful flight over and over.
Repetition will certainly help you deal with the fear!
Despite a popular misconception - Xanax is NOT a sleeping pill, or sleeping aid. It acts on a completely separate part of your nervous system - and it targets anxiety (and is VERY good at alleviating it), but it doesn't make your drowsy or sleepy (of course, if you can't sleep because of anxiety, then by removing the anxiety it helps you sleep - but it does not cause sleep, per se).
We can only hope...