Freud recognised the importance of anxiety. He was one of the first writers to argue that anxiety was a critical component of neurosis. Freud distinguished between 'objective' and 'neurotic' anxiety. By objective, Freud meant the reaction we have to external danger or expected injury. Neurotic anxiety was viewed as free-floating and something likely to hinder or even paralyse actions. Freud also wrote about a form of anxiety that was not groundless but was fairly focused on one or more objects or situations. Today, we think of these as phobias.
Freud reasoned that anxiety was largely sexual in origin. Sexual thoughts and impulses were repressed and were then transformed into some symbolic representation. Freud considered the root of problems to exist at early stages of development. At first, Freud used hypnosis in an attempt to uncover early traumatic experiences. Later, he moved away from hypnosis in favor of dream analysis and a technique called 'free-association'. Dream analysis hinged on the notion that unconscious desires would manifest themselves in dreams in a symbolic way. Freud would encourage the recall of dreams so that he could provide a detailed interpretation. Free association refers to a technique where the patient is encouraged to speak freely about anything that comes into their head, thus revealing preoccupations to which the patient may be unaware.
Psychoanalytic theory probably developed from a case study involving the fear of horses by a five year old boy known as little Hans. Freud actually only met the little boy once, but the development of concepts such as the Oedipus complex, repression and castration anxiety were felt to be substantiated through the experiences of little Hans, as described in an ongoing correspondence by his father with Freud. Fear of horses was interpreted as fear of the father and the anticipation of punishment, which was likely to be castration. Freud argued that the horse symbolised the little boys Oedipus complex, that is, his sexual desire for his mother and the fear of jealous retribution from his father. It is perhaps worth noting that little Hans said that his fear of horses started when he saw a horse collapse in the street. His fear began immediately afterwards and was confirmed by both his mother and father.
The problem that so many people have with Freud's ideas is that they can neither be proved nor disproved. Freud's approach was to use single case studies as the basis for his own form of self-analysis, which in turn appears to have been heavily influenced by his relationship with his own father. Although still widely practised, psychotherapy is not regarded as a treatment of choice by most licensed/chartered psychologists. Psychoanalysis is often considered rich in theorising but lacking in science, indeed the historian Edward Boring described it as pre-scientific.
So, is psychoanalysis useless? I don't think so. There is some evidence, for example, that unconscious factors influence the emergence of anxiety and some fears have symbolism attached. Freud should perhaps be thanked for his attempts at developing a theory and interpreting mental processes that ultimately triggered such extensive intellectual debate. His perceived limitations also gave rise to the development of alternative approaches all attempting to understand, explain and ultimately help in the treatment of mental health issues.