Actually, a ship on Guard wakes when an enemy ship comes within sensor range.

A ship on sentry wakes when any ship comes within sensor range; but because we are in the beta in immediate/eternal war there is no difference at the moment. At the moment they don't function properly at all.

Personally i would like to see two additional modes, namely Interdict and Sally.

Interdict: wake when a enemy ship comes with (flight range - 1) / 2. This will allow you to attack and return to the original location.

Sally: wake when an enemy takes up position directly adjacent to your ship. This will allow you to attack without changing position.

These two would become very useful when the auto-attack comes along or if you could give these orders to ships in orbit or docked in a base. Auto-Interdict and Auto-Sally please.

And another someone else posted a sleep or hold ground option  the ship stays put no matter what and doesn't ask for new orders at all

That's what I had deducted from messing around with the option... but it does seem that a guard option should wake up at some point.  Guard should not = sleep... that should be a separate option :-/

Personally, I had originally thought that sentry would be a recurring movement option, but the current build would not let me do that.  To me Sentry should be the option for a ship to patrol go back and forth indefinitely until an enemy comes within sensor range.  It would be nice if choosing not to attack an enemy in range did not necessitate recreating the sentry every time an uninteresting ship comes within range.  Rather I would like a zoom to location pop-up, with the option of breaking the sentry order to attack.  Or possibly some sort of "Go back to sentry option after the attack."  Its been annoying in other games having to recreate the sentry path every time I tell a unit to go attack something that's on my boarder...

I'd prefer the phrase stand down over sleep.

Sentry = stay where you are unless any ship comes near or past you

Guard = stay where you are till a enemy ship comes near or past you

ST:Armada had green,yellow and red alerts along with patrol,defend,standby,attack modes so you could adjust either indiidual ships or affect whole fleets.

I don't think it auto attacks, just wakes up.  If a ship can plow through your sensor area in one move, you would never see it coming.