I have read somewhere that Arhats (people who attained Nirvana) do not sleep like normal people do. Instead they just stay calm in a suitable position to give the rest required for the physical body, but their mind is always alert...
Is this true?
According to the teachings I received, once the practitioner attains certain level of mastery in meditation, their sleep acquires a character of meditation. It's not like they don't sleep at all, but they do retain certain level of deep awareness during their sleep.
Specifically, when they see a dream, they know it's a dream. They remain aware of their body lying down on the bed. They remain aware of the content of their consciousness no matter how disjointed it gets during a deep sleep. If something happens around them, they wake up easily to provide their help if needed.
The Buddha is reported not to have slept, but teaching ceaselessly and just entering a state of meditation for two hours per day/night. I don't have any scriptural evidence for this and am rather sure, that none such evidence exists.
An Arahat does not sleep like a normal person. He may give rest to the body but in doing so is fully aware hence not asleep. This is a natural consequence of reducing impurities of the mind. Also the level of awareness does not change.
Another enemy is laziness, drowsiness. All night you slept soundly, and yet when you sit to meditate, you feel very sleepy. This sleepiness is caused by your mental impurities, which would be driven out by the practice of Vipassana, and which therefore try to stop you from meditating. You must fight to prevent this enemy from overpowering you. Breathe slightly hard, or else get up, sprinkle cold water on your eyes, or walk a little, and then sit again.
Similarly, when you go to bed at night, close your eyes and feel sensation anywhere within the body. If you fall asleep with this awareness, naturally as soon as you wake up in the morning, you will be aware of sensation. Perhaps you may not sleep soundly, or you may even remain fully awake throughout the night. This is wonderful, provided you stay lying in bed and maintain awareness and equanimity. The body will receive the rest it needs, and there is no greater rest for the mind than to remain aware and equanimous. However, if you start worrying that you are developing insomnia, then you will generate tensions, and will feel exhausted the next day. Nor should you forcefully try to stay awake, remaining in a seated posture all night; that would be going to an extreme. If sleep comes, very good; sleep. If sleep does not come, allow the body to rest by remaining in a recumbent position, and allow the mind to rest by remaining aware and equanimous.
Source: The Discourse Summaries by S.N. Goenka
Also see: Suppati Sutta
After first attainment , i had entered into sleep while meditating for 3 times. When i entered into dream i had aware that i am entering into dream, there once i have entered dream , i notice horrfying events in full awareness, i notice each event in dream as it is and then finally everything gone , i was left in a empty space-like state still meditating till i woke up. It is very fascinating event. So i can understand what will be arahant like , it is not dreaming anymore , it is mediation while in sleep.