Here's a whole bunch of opinions on some of the topics that have come up in the thread so far.
Regarding Detect Magic ****ing up a whole School of Magic.
Put me in the camp that says "Nope." For all those reasons along the lines of clever use of illusions will allow an illusionist to get away with a lot more than if they are used as a blunt instrument.
I like the various suggestions re. how Detect Magic interacts with Illusions. There are enough suggestions in this thread to satisfy pretty much everyone. Personally I'm of the opinion that Illusion Magic shows up as Illusion Magic. This does not mean that in all cases Detect Magic will make the illusion useless. A sensible wizard will still be careful here for the many reasons listed above about how Illusion Magic is not necessarily harmless.
Regarding the difference between Figments and Phantasms:
I consider a Figment to have a physical presence. The illusion magic manipulates light and air to create image and sound. Instruments for detecting variations in light waves and air pressure (like, oh, eyes and ears) will react to these physical phenomena in the usual fashion. I would also say that magic has a physical presence and thus instruments that react to magic (like, but not limited to, Detect Magic) react to its presence in the usual fashion. (Because there is ongoing magic manipulating the Figment for the duration of the spell, and after of course. See the description of Detect Magic for more information.)
A Phantasm has no physical presence, it exists purely in the mind of the target. (Let's assume for the sake of fantasy rpgs that mind is a separate class of thing from the physical brain.) The magic "moves" the target's mind in a manner analogous to that in which it moves light and air. As the target's mind is fooled any sort of Detect Magic cast by the target will be interpreted in such a way as to not "see" through the Phantasm.* Of course someone else casting Detect Magic on the target of the Phantasm will detect Illusion magic on them.
Those of you who have not wandered away in boredom yet may have noticed that I am treating Magic as a force that straddles the gap between mind and the physical world. It is a physical force that can be manipulated by the (sufficiently trained) mind. Descarte would be so proud.
Regarding Invisibility. (Um, is Invisibility a Figment? At work can't access books. I'm assuming it is.)
Firstly I gotta disagree vehemently with whoever it was who said that invisibility disguises all all properties of the item on which it is cast. The example given was of a flaming sword. What so invisibility disguises things like it's weight? The heat given off by the flame? The light given off by the flame? The pain inflicted by the sword? No. There are limits to it.
What the players have to decide is what exactly those limits are. Me, I say it effects visible light** and a bit around it on the spectrum. So Infrared and Ultraviolet are effected as well. That's it. Magical aura is still there.
The more difficult question is, is the light given off by the flaming sword effected? If the Figment warps light so it passes around the subject perhaps the torch throws strange warped shadows...
One of my (many) ongoing gaming projects*** is to re-write the DnD Schools of magic and spell descriptions so that they make more sense to me. One of the things that inspired me to try to do so was the difficult nature of Invisibility. I mean why the eff does it have some sort of moral outrage regarding violence?
What I dreamed up was this: Invisibility is actually a part of the Ethereal School. What the spell does is draw a thin veil of the Ether around the target. The veil goes around the character, what they are wearing and any small objects they pick up. This veil warps light around it. Light coming out from under this veil, say from a torch, is feint and warps in strange ways as the torch and the viewer move. The target can see the normal world in the same way as someone in the fringe of the Ethereal Plane can. That is to say the world appears unclear and shadowy. I would not allow an invisible character to make out fine detail. For instance read a book that it has not picked up.
But this veil is delicate and easily torn by vigorous action. So any combat action and moving faster than base move per round tears it, ending the spell. In addition the veil provides no cover from beings in the Ether. In fact they can see you much more clearly. (A notable addendum to this is that I treat incorporeal undead as being partly in the fringe of the ether and thus they will see the invisible person much more clearly. Also they don't use visible light anyway but home in on life force. Guess the inspiration for this and win a fabulous No Prize.)
Wow, that's a bit of an essay that is.
Cheers if you got this far. Hell, have another No Prize if you did.
*Although I wonder is the target of the Phantasm within the AoE of their own cone of magic detection?
**that is light visible to humans; whatever the hell wavelengths that includes.
*** read gaming stuff I'll probably never finish.