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, 2-wire Serial Interface, 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.
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.