In my experience, Windows 7 has never been great at resuming from sleep or hibernation so I do not use it.
I would just turn off sleep and hibernate and use a blank screen saver. You may be able to use it successfully if you don't allow some key components to sleep but I have found that more work than it is worth.
Is this a laptop on battery power where you really want to mess with power saving?
Its a desktop. I accually fixed the problem though. I removed my Physx GPU and then sleep mode worked fine and it still does now. I don't understand why this happened I know it isn't a power problem. I have a 750 watt PSU. Could this have been a driver problem?