We all know general souls, except those claimed by Daedra (and Shor, perhaps should adding other Aedra) would go to dreamsleeve, wash off all memories and return to Mundus. My question is, is this a common concept in some cultures of Tamriel, or it is only regarded true and used by some scholars and mages?

Mankar Camoran mentioned dreamsleeve in his Commentaries. Is dreamsleve a common concept in elven cultures, like Asian people believe in Samsāra, that common elves know they will return to Mundus to start a new life after their death? Or they believe they will escape Mundus forever into Aetherius after their death? And regarding human, most Nords want to go to Sovngarde after death, then what about those who cannot go there? We see in skyrim that a priestess of Arkay announced souls go to Aetherius. Did she mean dreamsleeve, or Aetherius in general? Do Nords know the existence of dreamsleeve and they will eventually return? And what about other men and beast races?

I think the Dreamsleeve and Sovngarde are all parts of Aetherius.

Yes they both all.

The problem is, for the Nords, do they know they will return Mundus to start a new life if they are not good enough, or they believe they will not return, destined Sovngarde or other worse part of Aetherius?

And for the Altmers and Bosmers, it is a problem of what is the true meaning and method of "escaping Mundus", regarding they know the existence of dreamsleeve or not.

Well if you aren't allowed in, I would assume you go to the Dreamsleeve and try again, although you could end up being someone who doesn't hold Nordic values(honor and glory in battle) sacred, so they probably wouldn't end up there at all unless they strike lucky or they are somebody like Athis who has a Nord way of thinking.(Sovngarde isn't exclusive to the Nords. .)

Well, it's not about the fact in the universe. It's about how common mortal think of their death.

For a Nord, if you don't know you will have a second chance, you will think your death a final game: glory in Sovngarde, or doomed in some other places in Aetherius forever.
But if you know, you may think "If I failed this time, maybe in the next life my soul will go to Sovngarde."

And for elves, if they know the function of dreamsleeve, then dreamsleeve means death does not lead to the freedom from Mundus, that everybody has to return to stay in this prison again and again, unless by some means your soul can escape dreamsleeve and escape Mundus forever. If they don't know, then there's no such troubled thoughts.

I don't think the Elves know the function of the dreamsleeve, but some elves think they have the solution to be free, and those are the losers known as the Thalmor. I hope their theory is wrong, because if they think killing every man is the solution, then Stendarr preserve us.

The Thalmor's theory has its logical flaw, which is vital, so their goal can never be achieved.

If the elves don't know the function of the dreamsleeve, another question is that, why don't they just kill themselves so that their souls can go to Aetherius immediately? There must be some michanism prevent this to happen or we would never see so many elves around.