The Sims 3 Guide - Sunset Valley
Collectibles - Mysterious Mr. Gnomes
When you manage to locate a Mysterious Mr. Gnome, if you put him in your house as any other item, indeed like you would an ordinary gnome, he will come to life in the early hours of the morning (around the same times as ghosts) and have some fun. He will also cause mischief and meddle with your objects!
You can find him as a gem, metal, while fishing, in Pleasant Rest Graveyard's Catacombs or as part of the Thief career. Try interacting with him to see his unusual character. You could also sell him from 1,000 Simoleons, but who would be that heartless? Tell him apart from regular gnomes by the flower on his hat.
Note: All collectible items can be displayed in some form or another in your house, or in your garden. Doing this can dramatically increase the attractiveness of your rooms and garden, and thus improve your Sims' moodlets.