I've never cast it. Aside from the very limited application in a game that does not use clairvoyance or ESP spells, all the other 3rd level mage spells are so good that I don't feel like burning a slot just for this one.

So is this actually useful at all? The spell description says that it prevents spells like Detect Invisibility and Invisibility Purge from working on the target, as well as thought-sensing spells.

Where would you cast this? Are there any monsters that use those spells? The only possible relevant situation I can think of is against the tarnished sentries or Terikan (who seem to not be fooled by invisibility). However, the sentries never actually try to dispel invisibility with a spell, it's just as if they can see invisible characters.

Any ideas?

Nope, AFAIK no enemies have ever cast Detect Invisibiltity or Invisibility Purge against me but then again I have never played this game to completion so there might be an exception.