There was an interesting piece called Science of Sleep on 60 minutes last night. We still don't know enough about what goes on while we sleep, and why it is so important to our survival. Several studies have shown the results of too little sleep though. There are effects that you might suspect. Diminished reactions, difficulty in concentrating and coordination problems. Like people who have consumed alcohol, sleep deprived people don't know just how impaired they are. You can't "train" yourself to do without sufficient sleep.
Memory is actually improved while you sleep. You will remember more of what you study the night before if you get some sleep, than if you pull an all-nighter for the test.
Some effects were not expected. The studies show a disconnect between the emotional part of our brain and the reasoning part of the brain in sleep deprived people. Similar disconnects are found in people with psychiatric disease.
Insufficient sleep can also contribute to obesity. A hormone called leptin is connected with feelings of hunger. Levels of leptin drop in sleep deprived people and they overeat.
In one of the studies a subject was allowed only four hours of sleep for six days. The subject was healthy in the beginning, but after just six days of limited sleep he had become pre-diabetic. Lack of sleep messes with the bodies ability to process sugar.
Really interesting stuff. The two parts are below. Each are about 12 or 13 minutes long.