You do not sleep or dream, instead you enter a trance, and you only need six hours per night. Your eyes are open and you have a derpy blank look on your face. You may sit up, but your head must be resting.
You maintain awareness of your surroundings, but keep no memory of it. For example, if someone enters your room, you can choose to wake up, but if you choose not to, you won't remember that they were there.
Trancing has certain drawbacks, however. It is easier to affect your mind while you trance. Also, compared to a human's sleep cycle, trancing is less effective than sleep when it comes to healing your body, so those that trance tend to recover from sickness and injury more slowly than those who sleep.
If any effect would cause you to sleep, then your sleep functions normally. When you sleep for several days in a row, your body recovers faster, your mind is no easier to affect, and you even have dreams. However, sleeping is an unnerving experience because you are not used to it. If you sleep or lose consciousness, you might have a mild panic attack when you wake up.