Pardon my Nas quote.
So does the Sleep effect even work in NWN? I got the 2nd-chapter version of the Namarra rapier, which is supposed to put victims to sleep {ha, a melee sedative-invector; cyberpunk got nothing on the Realms!}. For some reason, however, whenever i hit someone with it and he fails the save, i see the zzzZZZs coming from him, and the snorring sound, but he just keeps attacking! Is a sleeping person SUPPOSED to be furiously hacking at you with a scythe while dodging every strike of yours? Last time i checked, that's not how a sleeping person is supposed to act. A sleeping person is supposed to lie down and wait for you to CdG him.
I also examined some of those "poor victims" of my Namarra when the zzzZZZs were coming out of them, and - nothing. No "sleeping" status icon in theyr box, like the one you can see in the boxes of characters that are asleep without your intervention.
So is it just broken, and magical sleep won't really work in the game, or what?

Some creatures are immune to sleep effect, like elves. But the sleeping graphics are still aplied to their 'bodies'. It's a bug, I guess.

If the effect is exactly the same as the wizard spell Sleep, then anything over 5 Hit Dice is immune. So, anything beyond goblins, rats and the like isnt going to be affected. As for the zZzs, I would speculate that the game rolls for the saving throw before checking for immunities. For example, when I've used a paladin against mummies, I sometimes see something like "Will Save: Fail. Immune to fear" pop up. So, the game tags the monster as having failed its save, gives it the zZzs but then remembers that the monster should be unaffected.

Thats my guess anyway. Just enjoy the rapier on its own, and if you happen to incapacitate a dire badger or something, take it as a bonus.

Thancue for the explanation, guys. I'm sooooo selling Namarra.

it should be a bug (no suprize in NWN). The rapier only induces a sleeping effect, it doesn't cast sleep, same with the short sword (fay short sword? can't remember) that induces daze, it doesn't have the limitations the spell daze has.

The shortsword you speak of is Feyduster. I had it in chapter 1, and it actually worked. The first chapter's version of Namarra also dazes, and that also seemd to work. But if you say it lacks the spell's limitations, then why didn't the 3rd chapter's Namarra {nor the Fey Spear, btw} actually put anyone to sleep?

NWN isn't bug free, from little things like creature proficiency not working with weapon finesse, to bigger thinks like being unable to initiate dialogue with quest characters because they are forever in action, to huge problems like being incompatible with certain hardware leading the "Blue Screen of Death" and eating saved games in the process.

The sword is suppose to have an effect closer to the spell Power Word Sleep (which isn't in NWN so don't bother trying to find it in the manual) which merely requires one to fail a will save.

That your enemies are making the sleeping action, but keep on fighting is the sign of a bug, a creature with more then 4hd or of elf or half-elf race type hit by the first level spell Sleep merely fire up an immune to sleep in the dialogue/attack role screen and have no ZZZZs appear next to them. It's possible that your game is calculating the damage after the will save and then waking them up the instant after you hit them (Can't remember if the Coup de Grace has a hd limit).