When I press the sleep button on the device then turn it back and "update" the uptime shows the time as if the device did not go to sleep.
Assuming the button you are talking about is the "power" or "lock" button, that isn't necessarily putting the device into deep sleep. In fact, looking at the definition of deep sleep (when the uptime counter will stop) I think it would be very rare. The phone will almost certainly keep the CPU running at a low level to monitor for alarm timers and other system scheduled events. If you are wanting to monitor how much time the phone is in "sleep" (screen off, phone locked etc) I suspect you will need to register a broadcast receiver and monitor for those specific events.
take a look at this thread Android - how to receive broadcast intents ACTION_SCREEN_ON/OFF? also take a look at the power manager