Here's an oldish article on Edward Lane in Aramco World (author is Jason Thompson):
[I really think the use of Said to tout Lane's book is amazing:]
An Account of the Manners and Customs of the Modern Egyptians was published in December 1836. It was an instant success, selling out its first printing within a matter of weeks and subsequently going through numerous editions and reprints, right down to the present day. Acclaimed during the 19th century as “the most perfect picture of a people’s life that has ever been written,” Manners and Customs exerted an extraordinary influence that has only grown stronger with time. As Edward Said wrote in his controversial book Orientalism in 1978, the book became “an authority whose use was an imperative for anyone writing or thinking about the Orient, not just about Egypt.”
[Here's the info from the article on the nights:]
Lane’s dismay was somewhat assuaged by a consuming new project, a translation of The Thousand and One Nights. Lane had long been interested in this classic work, also known as The Arabian Nights, because he thought it presented “most admirable pictures of the manners and customs of the Arabs, and particularly of those of the Egyptians.” That such fantastic tales, redolent with magic and improbable coincidences, should be taken as a reliable guide to Arab and Egyptian society might seem strange, but Lane clearly understood something very important about The Arabian Nights: A jinn might not really be held captive in a bottle for centuries, but the descriptions of that bottle—its shape, its design, its stopper—might all be drawn accurately from real life. So, too, with many other details like manners, political organization, religious practices and material culture, all of which are to be found in profusion in the pages of The Arabian Nights. It was precisely those details that Lane wanted to present, with explanations, to an English readership.
Lane’s translation of The Arabian Nights appeared in monthly installments between 1838 and 1840 and was then published complete in three volumes. Highly readable and thoroughly enjoyable, it reigned supreme as the leading English translation for most of the 19th century. Although it was eventually displaced from its preeminent position by other translations, Lane’s has its partisans even today, for there is still no one translation of The Arabian Nights that can be considered definitive. One of the beauties of Lane’s translation is its 650 illustrations, executed by some of Britain’s leading wood engravers under Lane’s careful supervision and well worth perusing for their own sake. Preparation of The Arabian Nights was a great achievement, but also a relentless ordeal that forced Lane to write prodigiously—besides correcting proofs for both words and pictures—month after month for three years. But the end of the task brought no relief: First, his mother, the most important formative influence in his life, died. Then the publisher of The Arabian Nights went bankrupt before paying him in full. Having just married Nefeeseh, Lane needed money more than ever. Yet he was not sure what his next major project would be or how he could make it pay. In 1841, at age 40, Lane was experiencing an authentic midlife crisis.