Illusion Magic: I Don't Believe This Crap Edit
Illusion magic has the distinguishing characteristic of being either the most powerful school of magic, or the least -- entirely at the whims of your playgroup. Illusions can be used as distractions, threats, enticements, concealment, modes of communication, prisons, attacks, disguises, false targets, entertainments, misdirections, religious inspiration, incitements to riot, madness provokers, commercial fraud, redecoration, time wasters, limited-use ability wasters (like prepared spells, scroll spells, or use-per-day spell-like abilities), or traps (in conjunction with dangerous terrain, monsters, substances, events, or magical effects). And that's just using the 1st level spell silent image.
People just don't expect their senses to lead them wrong, even in a world where people know that illusions exist. I mean, if a wall of fire suddenly pops up out of nowhere, it's actually more likely to actually be a real damaging wall made out of magical fire than it is to be an illusion of the same thing. And truthfully, who wants to pop a hand in to check? Not me either.
What this means is that illusions are incredibly powerful because they allow such perfect forgeries of the real world. The downside of this is that lots of DMs try to counter the efforts of creative players by using a particularly harsh interpretation of the Disbelief rules in order to nerf illusions out of existence. It works like this: by the rules, you get a Will save vs. an illusion if you "interact" with it. DMs looking to throw salt in an illusionist's game usually allow that to mean "in the same square as an illusion" or "looking at it." You also automatically make a save if you have "proof that an illusion isn't real." What that means is anyone's guess, because in D&D even the most unlikely circumstances could quite plausibly occur without illusionary influence. A silent orc moving through the grass might be a silent image of an orc, an orc in a silence effect, an incorporeal orc, or just an orc who happens to be really sneaky. Once you've disbelieved the illusion, you suddenly get to see through it like it was transparent.
Usually, DMs looking to punish illusionists will give multiple saves per turn, and then at some point just say that the target has automatically disbelieved the illusion, and this is possible only because the rules regarding illusions were written in the style of previous editions of D&D called "Rule 0" where playing a pick-up game of D&D involved a few hours of discussion about how the DM handled most effects. The current edition of D&D (3.X) mostly did away with this because it sucks up valuable game time to have arguments about D&D rules and it was the worst part of playing the game; however, illusions were never fully overhauled, so we are still stuck with this noise.
Potential effects of illusions are also hotly debated. Some genius at WotC has laid down the law and said that the various image and illusion spells don't cause darkness, but that doesn't stop them from creating opaque mist or smoke or dust, obscuring objects, or even autumn leaves that drift around a person's head and float away from his touch, effectively blinding a person from dangers as well as complete darkness. Additionally, there are DM vs Player wars where DMs try to interpret the "single object, creature, or force" line to mean "no more than one person or a monster in the illusion" and players respond with things like "its an illusion of a single force that summoned many monsters like the spell summon monster or gate" or "its one object connected by many invisible threads." Other DMs and players are convinced that you control all visual information in the Area of Effect, while others agree but say things like "you can't trap a creature in a bubble with visual information on the inside that mimics the world except for some key creatures/object/terrain/effects, but people outside see him as normal because his image is on the outside of bubble."
In the end, it's a mess because the current rules can be made to do amazing things by creative people, but those amazing things break the level system and that means that DMs are forced to punish players for their creativity, thus hurting everyone. That being said, here are some playable rules regarding illusions that won't cause you to stab out your own eyes.
Picture Imperfect: Figments and Glamers Edit
The most problematic of Illusions are the Figments and Glamers. Shadow Illusions can do wonky things with creating partly real objects, and Color Spray (a Pattern) is possibly the best first-level spell available, but those both have well-defined behavior most of the time (load-bearing Shadow Conjured Walls of Stone notwithstanding), so dealing with them is mostly straightforward.
So what exactly do Figments and Glamers do?
Figments are illusions that are anchored to a point or area in space. This is usually space relative to a particular large object - like a planet or building - and such an object must take up more space than the illusion itself does. This is meaningless for auditory figments, but the space taken up by the illusion includes unfilled volume (any point that is "between" two points on the Figment counts as part of the Figment), so creating a thin film of Figment around an object which travels with the object is impossible. It also can't be anchored to a creature, so a figment used to disguise someone needs constant concentration - and doesn't work when the creature is in combat and dodging all over their square. They create a solid image, which can be opaque, translucent, or transparent, but cannot actually make portions of real things more transparent or translucent. A figment can be used to duplicate the background behind someone, but this is about as effective as putting a backdrop in front of them and grants a +4 bonus to the Listen or Spot check to notice the errors in perspective.
The Image spells in particular (silent image and anything based on it) are able to produce images of a single contiguous creature, object, or other effect, which can react to stimuli while the user concentrates on it. You can't create a series of creature-like images with invisible ties between them, or even ones too small to perceive, due to the limitations of the spell and your own perceptive ability.
Glamers, on the other hand, can be anchored to just about anything within the limits of the spell, and serve to disguise the object or creature they're anchored to. Unlike Figments, Glamers can potentially hide portions of a creature in a way that doesn't look like hiding behind a cardboard cutout, that's exactly what invisibility does.
Disbelieving Reality: Shadow Illusions Edit
Shadow Illusions are created by siphoning semi-real matter called "Shadowstuff" from the Plane of Shadow (The Plane of Shadow, as well as the rest of the Inner Planes, will be covered in more detail in the Tome of Tiamat). Shadowstuff is real, but it's noticeably flimsier than whatever it's supposed to look like. Shadowstuff actually can be used for structural purposes about as well as the imitated matter, but it's easier to destroy and creatures and weapons made from it don't deal as much damage as "real" ones. Objects made of Shadowstuff don't have the same value as real objects, and no amount of Shadow Diamonds can be used to power a Raise Dead spell.
Believe It or Not Edit
Any illusion which allows a "Will disbelief" saving throw grants anyone who perceives it a Spot or Listen check versus the spell's save DC, dependent on the primary sense the illusion targets (i.e., Spot for Major Image or Listen for Ventriloquism). The target may benefit from the other skill, and also benefits from sufficiently powerful secondary senses (Scent, Blindsense, Tremorsense, etc.); each such sense which is active provides an additional +2 bonus if the illusion doesn't have the components to fool that sense. The illusionist can choose to replace the DC with 10 + an appropriate skill bonus. Bluff or Perform may be used for mimicking sounds, Craft may be used for anything that they could use the skill to make. This check is rolled secretly.
The Spot or Listen check determines if - and how far away - the creature notices discrepancies, which grants an immediate Will save with a bonus of +5 to disbelieve. If either of these checks succeeds, any discrepancies are ignored and the mind automatically comes up with a justification for believing the illusion.
Beyond that, you receive a Will save every time you physically touch the illusion itself (with your own body or any attended object). If the illusion doesn't even try to react to the interaction, this automatically succeeds. That means that Silent Image and similar illusions are primarily useful if the subjects wouldn’t bother to interact with what the illusion is portraying at all; illusions of creatures risk being seen for what they are every time someone attacks them. Illusions of summoned creatures can still be useful, of course, since an attack made against an illusory Owlbear is an attack not made against anything you actually care about. Interacting with an illusion in a way that makes it obvious that it is illusory (or at least not corporeal) gives everyone who can see you do that the same Will save that you get.
An illusion does not block line of sight for creatures that have succeeded on a disbelief save.