This verse is not very clear in Hebrew, but it seems reasonable to understand it to say “(they are) like a dream after one awakes, O Lord; when you rouse, you despise their shadows.” The meaning is that the wicked will last no longer than the images in a dream (see similar figures in 39.5-6), that disappear as soon as one wakes up. In line a Revised Standard Version substitutes the Masoretic text “Lord” by the conjectural text They are; this is quite unnecessary.
Revised Standard Version phantoms conveys the notion of something frightening, which is not implied in the Hebrew word. When the Lord rouses himself (see similar expressions in 35.23; 44.23; 59.4-5), he “despises” them; the word here has the idea of “forget intentionally” (see discussion of the same verb in 69.33). Good News Translation “they disappear” does not have God as the subject of the action, which is what the Hebrew text does. So something different should be said, perhaps “When you rouse yourself (or, arise), you dismiss them (or, you forget all about them).”
It should be noticed that the first two words of line b in Hebrew can be read “in a city of (their) shadows.” Dahood takes “the city of phantoms” (as he translates it) to be another name for Sheol; most take the Masoretic text to be a defective spelling of a form of the verb “to rouse,” or else they emend the text slightly to arrive at this meaning (see Anderson). The Septuagint (also Syriac, Vulgate, Jerome) has “in your city.”
Perhaps it is best to reverse the two lines, as Bible en français courant and New Jerusalem Bible do, and translate “Lord, as soon as you rouse yourself, you forget all about them, just as the images of a dream are forgotten when one wakes up.” In translation it may be necessary to reintroduce the subject “evil people.” It may, in addition, be necessary to make clearer how it is that the bad dream images depart when the Lord rouses himself. Otherwise the reader may have the impression that the Lord, too, suffers from the dream; for example, “Evil people are like a bad dream that goes away in the morning. The memory of them goes away when you, Lord, come and help me.”
Quoted with permission from Bratcher, Robert G. and Reyburn, William D. A Handbook on the Book of Psalms. (UBS Helps for Translators). New York: UBS, 1991. For this and other handbooks for translators see here .