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The album has several songs based on a theme of relationships whether it is relationships that end badly as in "the Bitter End", power struggles in relationships "Special Needs" or the idea that soulmates live forever in the titletrack "Sleeping With Ghosts".
Songwriter Brian Molko told Kerrang! magazine that he was trying to exorcise the ghosts of the past. "I'm looking back to what's happened in my past emotional decade, trying to understand it. Trying to exorcise the ghosts and the demons of relationships past. It's the old cliche of it being therapeutic but it does work for me in that way."
Sleeping With Ghosts reached the top 20 in the UK, top 40 in Australia and sold well throughout Europe. The first single "The Bitter End" reached number one in Portugal, went top ten in Greece and made the top twenty in the UK and Italy in early 2003. Second single "This Picture" went top ten in Portugal and top 40 in the UK and Spain in June 2003. "Special Needs" made the UK top 40 in September 2003. In 2004, "English Summer Rain" made the top 40 charts in the UK and Spain while "Protect Me From What I Want" made the French charts. In the US, "Sleeping With Ghosts" reached top twenty on the Heatseeker charts in 2003.