Many people on these forums have reported problems with machines failing to sleep. Two of us who contribute to the MacUser forums in the UK have discovered that what we have in common is the use of D-Link routers/modems and that when these are disconnected the problem is resolved. One is using an eMac running Panther while I'm presently using a G4 Cube running Tiger. The D-Link equipment is different - one is a D-Link DSL-504T, while the other is a DSL-300T, but both are connected via the ethernet port.
Both of us went through the usual troubleshooting procedures, including deleting the Globalprefs and Power Management preferences. Both machines will sleep satisfactorily when manually set to sleep, but neither will sleep following the options set in System Preferences (whether or not the wake when modem detects a ring or wake for system administrator settings are ticked). Disconnecting the router/modem is the only thing that will allow the machines to fall asleep automatically.
D-Link's technical support has been unable to offer any assistance that might point to why this sleep issue occurs or what the solution might be. I don't know whether this problem occurs with any other modem/routers, but it certainly doesn't happen with the Netgear device I have connected to my home iMac.
While I can't offer a solution, I thought this information might be useful to others who are experiencing sleep issues.