The mechanism that controls the sleep signal when your portable closes is called a reed switch. It consists of a metal switch assembly (two pieces of thin metal inside a vacuum-sealed glass bubble or other insulator, connected to the logic board via wire), and a magnet somewhere else. When the magnet comes close enough to the glass bubble, the metal strips connect, closing a circuit and telling the computer to go to sleep.
In the MacBook Pro, the magnet is located inside the display, on the right side. (If you're typing at your keyboard, staring at the screen.) It's about halfway down on the 15" model, and if you hold a paperclip to the front-facing area, it'll stick.
The reed switch itself (the glass bubble with metal strips inside) is in the same position, but inside the main body of the computer itself.
When you close your lid, the two come into close proximity. Bang, sleep.
There is a possibility that /.../ the reed switch [is] damaged somehow. If you have a magnet, you can check by running said magnet across the top of your case, on the right-hand side. (The part of the machine with the speaker grill and keyboard, that is.) The best way to determine the position, since it's different with different display sizes, is to use a paper clip on the side of the display to find the magnet, then determine the switch location from that.
