Christopher Sly is a drunk and a beggar with a string of menial jobs and an appetite for cheap beer. He talks a lot of trash, likes bar brawls, and has no respect for women. He's also easily duped when the Lord tricks him into believing that he is not Sly "the beggar" but rather, a "mighty Lord" who has been in a deep sleep for the past fifteen years. He's attracted to a male servant dressed as a woman, misquotes famous lines from Elizabethan plays, and falls asleep during the performance of the five-act inset play that is supposedly staged for his viewing pleasure (it's really staged to entertain the Lord and make Sly look like an idiot). In many ways, this is Shakespeare's way of lovingly parodying the kinds of drunken theater-goers, the "groundlings," that sat in the cheap seats.
This makes for some raucous fun but it also opens up questions about the social disparity between the lower-classes and the nobility – especially when we move from the tavern to the Lord's estate, where Sly is victimized by a nobleman with a lot of money and the power and resources to make Sly question his identity and sanity.
Sly's transformation from beggar to "mighty Lord" is also the first of many metamorphoses that take place on stage. His circumstances are especially useful if we compare Sly's humiliation and transformation to Kate's forced submission to Petruchio's will. Though we can't be sure of what happens to Sly after the end of Act 1, Scene 1, it seems unlikely that the guy has undergone any kind of realistic or permanent metamorphosis. Can the same be said of Kate?
Some editions of the play include extra scenes from another play (The Taming of a Shrew – believed to be a shoddy bootleg copy of Shakespeare's play). At the end of A Shrew, Sly wakes up in front of the tavern and thinks the Lord's prank has all been a dream. A bartender tells him to go home to his wife and Sly says he will go home, where he plans to tame his shrewish wife now that he knows how. There's no evidence that Shakespeare wrote any of this, but the scene raises some interesting questions about how seriously we should take Petruchio's "taming school."