The primary cage is located in or near the center of the homes activity, where the family is the majority of the day. The sleeping cage is located out of that area, commonly in an area that provides a greater opportunity for sleep. Having two separate cages allows the simple movement of the Parrot and not both the cage and the Parrot. It can also act as a signal for the Parrot that its time to sleep.
Sizing is all over the place, with anywhere from the same as the day cage to very small. The favored is a cage that (as stated above) allows the Parrot to fully stretch their Wings (front to back & side to side). The height should allow the Parrot to enjoy the concept of a 'roosting ' perch, which commonly sits high in the cage and therefore above the floor. With a shorter cage, the can be duplicated by setting the cage of a table or stand.
Sleeping cages should not be without the normal load of food, water, perches and toys. Remember not to use undersized perches.