QUOTE (FuelDrop @ Jan 13 2013, 09:32 PM)

So if you make an illusion of a gun, and shoot someone with its illusion bullets, do they still take real damage?
And that's the crux, isn't it?
I would go this way: illusions can target the senses. This means you can make an illusion which can fool sight and hearing (obviously), but also taste, smell, and touch.
You can make normal illusions, which people can recognize as 'false', and you can make realistic illusions, which can fool the senses completely.
So, sight and sound is obvious and easy, but what about other senses? I figure 'smell' and 'taste' would be easy as well. Something 'smells' like food, but you can't place what it is unless it is realistic. You could make someone taste something and they might be able to identify it if it isn't realistic as 'something', but you'd need realistic to get all the flavours and details correct.
Touch is the tricky one. I figure, you could make a sensation under normal circumstances - make it feel like 'pressure' or 'resistance'. So, a full-sensation, crude, illusionary person shakes someone's hand. He would feel 'pressure' on his hand, though it wouldn't feel a person's hand. Making a person see his hand burning, he might feel 'something' on his hand, and react with alarm if it was crude.
But when you get into realistic illusions, things become fun. You could give an object the illusion of weight. The person would 'feel' the resistance, and would strain to pick up the object. However, regardless of how 'heavy' you make the object feel, and no matter how much he'd think he'd need to strain to lift it, it would still weigh how much it actually weighs. Much of the strain would be self-inflicted. You could make someone's hand appear to burn, and he'd feel the pain of having his flesh burn - but it wouldn't do anything, really.
The way I see it is that it would register as touch / impact / force, but actually apply no kinetic energy. So if you whack someone in the head with an illusionary baseball bat, they'd flinch - and perhaps flinch violently, but there'd be no actual damage, and no kinetic force. They'd react to the sensation. In a way it would be similar to AR simsense. Someone gets shot in the game, and it feels like they were really shot - but there's no kinetic force behind it - the target's own muscle spasms and reactions would be what sends them sprawling from the 'shot'.
Now, the fun part is - if you feel an object, and it 'feels' heavy, you may trick yourself into thinking it's too heavy to move. Your muscles would lock and tense against the illusionary weight, but until you actually make the attempt, you won't know whether or not you can lift it. If you go to an illusionary door and put your hand on it, you'd feel the 'resistance', and the grain of the wood and such, but unless you push against the door, you won't know it isn't there. Mind, if someone bumps you against it, you'll feel the 'resistance', even as you pass right through it without any problems.
-- you know, considering this -- I can easily see illusionary spells which inflict stun damage, simply from shock and trauma. If you make someone feel like they're burning, or crawling with spiders, and hit the 'realistic' button, you're going to do horrible, psychological harm to the target -- to the point where they may actually freak and pass out.