I had my R knee replaced 9 years ago last month (3/02). I originally injured it in 1984, had several "scopes" over the years till there was nothing left. I was 54 when I had it done.
All things considered, I think it's an improvement. Not perfect but an improvement. Had to go to a pre-op class. They told us what to expect. My doctor had me donate a unit of blood before the surgery. The nurse that gave the class told me it would be a "bloodless surgery." I asked her why I had to donate a unit of blood? She said they call it bloodless because they put a very tight tourniquet around the top of your leg BUT when they take it off; "you will bleed like a !
The tough part was the rehab and physical therapy. You Have to Do It! Otherwise the joint will build too much scar tissue, it will always be stiff, and you won't have good range of motion (bending)which is not good.
I have read that some hospitals do it as out-patient now. I can't imagine that but it's been 9 years for me so maybe it is possible now. My left knee is not in the best shape but replacement has never been discussed so I'm not raising the issue.
As for sleeping, you might start out with a firm pillow under the replaced knee. If you sleep on your back that may be OK. As for pain. Have you ever heard of phantom pain? You may experience some of that, post-op, but it eventually goes away.
Was it the most fun I ever had? No way! BUT, I had no choice and so far it's been OK. My wife & I walk for 2 miles around the hood almost every day, so I have no trouble walking and that's totally unassisted, and no I don't limp! I can ride my 10 speed without any problem just set a moderate pace, no Tour deFrance stuff. My job usually has me sitting or walking, not too much standing, but i expect that would be OK too.
Good luck! Don't fight the rehab, it's all for the best, everyone that has this done is not over the hill, it's not just for old people!