When the SM[2:0] bits are written to '000', the SLEEP instruction makes the MCU enter Idle mode, stopping the CPU but allowing the SPI, USART, analog comparator, two-wire serial interface, ADC, Timer/Counters, Watchdog, and the interrupt system to continue operating. This sleep mode basically halts clkCPU and clkFLASH, while allowing the other clocks to run.
The Idle mode enables the MCU to wake-up from external triggered interrupts as well as internal ones like the timer overflow and USART transmit complete interrupts. If wake-up from the analog comparator interrupt is not required, the analog comparator can be powered-down by setting the ACD bit in the Analog Comparator Control and Status Register – ACSR. This will reduce power consumption in Idle mode. If the ADC is enabled, a conversion starts automatically when this mode is entered.