sleep is a pause in the script, for as long as you tell it to, timeout is a loop. e.g.:
NPC Code:
if (created){ //starts a code block
timeout=0.05; //this sets the loop refresh;
} //ends a code block
if (timeout)//this begins the loop{ //starts a code block
message Fat People; //the NPC says Fat People
sleep 0.5; //sleeps half a second
message Skinny People; //the NPC says Skinny People
timeout=0.05; //this completes the loop
} //ends a code block
A sleep
NPC Code:
if (created)//if the NPC is created{ //starts a code block
message Fat people; //the NPC says Fat People
sleep 2; //pauses 2 seconds
message Skinny People; //the NPC says Skinny People
} //ends a code block
this is as far as my feeble mind understands this exact script, tho my wording probably isn't great. (i tried tho)