I've never been able to get it to work, but yes .. it is true sight IIRC.
You'll eventually meet an opponent using that ability, and it helped him quite nicely, cutting down poor edwin, who allways relies on Mirror Image
Some people have managed to turn this option on All the time, using a little bug. You select a script, which makes your thief detect Illusions, and then Dual-class him ( not sure it's done that way),
Your dual-classed character should keep detecting Illusions forever now [img]smile.gif[/img]
P.s. I saw someone posts it needs about 200 to become great
location of the character- spoiler Below :
( dont look down if you're not past chap. 4 yet)
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He's a thief, you meet in the underdark .. once you get the first quest, outside Ust Natha .. there's a group of enemies awaiting you, their thied uses the ability.