This is the story of a young lad who has never been scared of anything, growing up in a culture of superstition and fear. Finally his happy-go-lucky ways are too much of an embarrassment to his family, who live in proper fright, and his father sends him away. The lad, not at all discouraged, is determined to discover what the big deal is before he returns home.
He doesn't travel far (in this version) before he comes upon a haunted castle that everyone is afraid of. He agrees to spend three nights there; if he can live through all three nights he is offered a reward of money and a princess, but he is more interested in the idea of being frightened for once than he is in the reward.
Naturally the things that frighten other people have no effect on him, but he does spend three nights making friends with a range of ghouls and ghosts.
With Peter MacNicol as the titular character and Christopher Lee in a supporting role, this is one of the most enjoyable episodes of FTT. (Of course it's also one of my favorite stories, so that might have some impact on my opinion.) And the twist at the very end of the story did make me chuckle.
You can watch the episode for free on hulu.