I have heard from a few people that you can become 'psychologically' dependent on melatonin if you take it every night. But I would think that would be true with anything that you take to get to sleep.
Anyway, as I understand it, any more than 1 mg of melatonin is a waste (no additional benefit from the added mg's). I get the sublingual type at a vitamin store. It's really cheap.
I usually take mine between 10 and 11 and I jump out of the bed at 6 every morning. It is a really good antioxident as well.