You guys are all getting
line of sight confused with
line of effect. Line of Sight determines if you can see a target square, but you need line of effect to actually target your power somewhere. Think about a ranger firing a bow into a stinking cloud: the cloud blocks sight, but not effect. So he can fire and hope to hit something, even though he can't see what he's targeting. He has LoE but no LoS.
That's what
Sensing Eye is useful for. It changes where LoS is, but it doesn't change anything about LoE. So it only changes what squares get concealment/total concealment. It doesn't change what squares you can target, at all. That goes for when using Sensing Eye as well: the square the Eye appears in has to be within 5 squares of you and have a clear, unbroken line of effect between you and it. Using Sensing Eye won't let you target Sensing Eye (or most other powers) in any square you couldn't target already.
The big exception to those rules is
teleportation. Teleports require LoS but not LoE, so you can teleport through windows and walls of force (LoS, no LoE), but not through clouds of gas, illusory walls or darkness (LoE but no LoS). Sensing Eye would help a teleporting eladrin get around corners or into the third story of a building, since then the eladrin would have LoS where they want to go.