Sie means You?
Usually duolingo indirectly tells me that Sie is She/They, but from time to time it also uses it as You (not even sure if it is meant for plural You or singular You). Is duolingo making a mistake or am I just getting confused?
'Sie' (capitalized) is the formal version of 'you' (both singular and plural). 'sie' (lower case) means 'she' or 'they'.
@Sprachlaborant: your last sentence is not correct. The formal "Sie" always has to be capitalized (so it has to be 'Haben Sie gut geschlafen?' ;-) ): http://www.duden.de/rechtschreibregeln/gross-und-kleinschreibung#K84
You can replace the informal "du/Du" with the more formal "sie/Sie" although you're still only refering to a single person. For example ("Have you slept well?"): "Hast du gut geschlafen?" (= informal, one person addressed) and "Haben sie gut geschlafen?" (formal, one person addressed). The last sentence can also be used for more than one person (exactly like the English sentence) but then it's neither formal nor informal, there's no alternative.
So in conclusion, besides meaning 'she' or 'they', 'sie' can mean plural 'you' as well?
yes but I think Sprachlaborant is slightly mistaken with "Haben Sie gut geschlafen". 'Sie' can be plural 'you', but only the formal 'you'. Informal would be 'Habt ihr gut geschlafen'
Duolingo really needs to specify the plural when translating from english to german. It's really frustraing to see a You and never know weather is it supposed to be Du or Ihr. For example "You like apples" could be both plural or singular. Same with the formal Sie/plural sie at the beginning of a sentence (Sie wohnen in Berlin)