Hallucinations

Hallucinate
(I'm seeing shit on the wall...)
Why won't you go away?

—Dark Lotus - "Hallucinate"

I am not the type to faint
When things are odd or things are quaint
But seeing things you know that ain't
Can certainly give you an awful fright!

—"Pink Elephants On Parade", Dumbo

Bob has been undergoing Sanity Slippage and begins hallucinating. Depending on the show, these may result in a Tomato Surprise at the end, revealing that someone he's been talking to was Dead All Along, or that the person he killed was an innocent bystander or an ally.

In a game with a Sanity Meter, this is one of the signs (sometimes, the only one) that it's getting pretty low. The hallucinations may also somehow injure the character in-game, even though they're not actually there. They may also just result in a Camera Screw, Interface Screw, or Impairment Shot.

If Bob is undergoing a Mushroom Samba, the hallucinations will usually not be shown on-screen, making it look like he's afraid of trees and talking to rocks.

Depending on the nature of the show, the hallucinations could be a source of comedy, tragedy, or both.

If Bob is dying or near death, this may be the cause of his Dying Dream. If Bob has been brought Back From the Dead recently, it may be a symptom of Resurrection Sickness.

If the hallucination takes the form of a person talking with one of the characters, it has a very high chance of lampshading itself by saying "I'm just a hallucination," or something along those lines.

Of course, one attribute of having these is a difficulty to distinguish between real and imagined, leaving plenty of room for Or Was It a Dream? twists. And if you can't even distinguish between the real and the imagined world anymore, well...

If you can't believe the thing you're looking at, ask your friend if he can see it too.

If against all odds the hallucination has good advice, insights into your problems, or can see around corners that you're nowhere near, that's a Helpful Hallucination.

Entire Situation is a Hallucination

Anime and Manga

In Higurashi no Naku Koro ni, The first arc has the arc's main character hallucinating due to his paranoia. Unfortunately for... everyone involved, it ends violently, as it nearly always does in that show.
- That's not the only case, either. Shmion's freak-out at the end of the fifth arc (although that entire arc is one giant Freak-Out) and Rena's hallucination about the maggots in her blood are other prominent examples.
Dr. Stein from Soul Eater experiences hallucinations after being exposed to Medusa's madness for an extended period of time that involved various things, like Medusa being next to him and talking to him, her arrows, etc.

Film -- Live Action

In A Beautiful Mind, John Nash has quite a few hallucinations—including his roommate/best friend, his niece, and even the intelligence assignment he had been working on.
In Requiem for a Dream, Ellen Burstyn's character experiences vivid hallucinations as a side effect of her amphetamine addiction.
In the 1980 version of The Shining, the ghostly figures seen by Jack, Danny, and Wendy may or may not be hallucinations.
Trainspotting depicts several heroin-induced hallucinations.
The Science of Sleep is about a young man whose dreams sometimes intrude on his waking state, to the point that it's not easy to tell which scenes are real and which are his imagination.
The Fisher King concerns a homeless man who experiences wild hallucinations.
In Young Sherlock Holmes, assassins use a poison dart that causes the victims to imagine they're being attacked by inanimate objects, usually leading them to accidentally kill themselves (by jumping out a window, running in front of a coach, etc.).
In the Vincent Price film The Tingler, a scientist wonders whether it's possible to literally scare someone to death, and he experiments with a drug that gives its victims scary hallucinations. Later in the film, we see the vivid hallucination of a woman who is the selected murder victim. It is later revealed that the scene was not a hallucination, but set up with props.
In The War Between Men and Women, there's one scene where Jack Lemmon's character gets drunk and hallucinates.

Live-Action TV

The Firefly episode "Objects In Space" has an instance where River hallucinates the sound of a crashing ocean wave, followed by seeing leaves scattered around the cargo bay and mistaking a pistol for a branch on the ground. Other episodes have her hallucinating and having flashbacks to her time at the Academy. In Serenity, she has several hallucinations relating to Miranda.
House: The last episode of season 2 and some events from the last few episodes of season 5.
- House also had a patient who had been hallucinating her (unbeknownst to her) dead mother. In the end, the team manages to diagnose her by asking her to "speak with her mother", through which she remembers symptopms her mother had before dying and the team is able to identify the disease they're both carrying.
Stargate SG-1 has an episode where Jonas' mentor turns out to be schizophrenic and hallucinating the entire plot of the episode.
In the Supernatural episode 'Hello Cruel World', Sam went around yelling at his hallucination of Satan for a whole day before he finally broke down - at which point he saw Dean taking him to a random office building. He was understandably freaked out when his image of Dean turned back into Lucifer and the building turned out to be a storage, and by the time the actual Dean came to get him, he was shooting at walls.

Video Games

In Twisted Metal: Black, The Preacher was having these in his Prologue. What he thought was an exorcism was really a baptism.
In World of Warcraft, Herald Volazj, a Forgotten One in the Ahn'Kahet instance uses this as an attack, in combination with a Shapeshifter Guilt Trip- He puts a debuff on the party called "Insanity," which makes the player believe his party is trying to attack him.
- This can be rather terrifying if no one in your party tells you what's going to happen the first time you battle him.
In the first Max Payne game, after being drugged by the villains, Max hallucinates about being a video game character.
Eternal Darkness has this as pretty much its entire soul and fiber. Characters are capable of hallucinating even with a small sanity loss.
One of the Fallout 3‍'‍s expansion pack adds a questline, where you must go into a swamp and meditate in front of the cult´s sacred tree to gain entrance. Once you get to the tree, it sprays some kind of pollen what stuns you and when you turn and start walking away from the swamp, you'll be sent to a 'nice' little trip to horror lane where - for example - ghouls appear out of nowhere, you'll find your mom´s skeleton next to birthday decorations and you'll find the corpses of familiar characters floating in the swamp.
- And lesser extent there is the Vault full of hallucinogenic gas, where you find terminals with notes to yourself written by you, 'friendly' characters appear out of nowhere and you are forced to kill them as enemies and more miscellaneous facts.
"Brothers in Arms: Hell's Highway" has plenty of this. The player, as Baker, sees hallucinations of three killed comrades, three German soldiers and a young boy whom he failed to protect. Additionally, there is an instance when a stretcher toppled itself for no apparent reason which could also have been a hallucination. Mostly, this is done in cutscenes but does occur at a few specific points during gameplay. "Well doesn't this look familiar?"

Web Comics

Jin of Wapsi Square eventually starts suffering from hallucinations. She is aware that she is hallucinating, but can't tell hallucination from reality, so she resorts to poking people to make sure they are real.

Western Animation

In one oddly dark Robot Chicken sketch, Calvin and Hobbes kills his parents, believing Hobbes to have done it, and escapes to Mars... or rather, an insane asylum.
Jimmy Two-Shoes had Jimmy suffering from them during a Whole-Plot Reference to I Am Legend.
In Dumbo, the Pink Elephants sequence.

Single Character is a Hallucination

Anime and Manga

In Afro Samurai, Ninja Ninja turns out to be either this or an Imaginary Friend depending on how the viewer looks at it.

Film -- Live Action

In Fight Club, Tyler Durden isn't real.
Played with in Sin City. Jack Rafferty existed and was dead but Dwight hallucinated an entire conversation with him. Unlike most of the examples here, Dwight knew he was hallucinating due to stress.
In Rob Zombie's Halloween II, Michael Myers has hallucinations about his mother (and a selection of other random things, including pumpkin-headed aristocrats and white unicorns.)
In Harry Potter and the Order of the Phoenix, Harry thinks he sees Voldemort standing on the train platform, then when he looks back nobody is there.
In Vanilla Sky and the Spanish movie it was based on, Open Your Eyes, the protagonist keeps seeing the woman he's with as having the face of the woman who died in a car crash.
In Jacob's Ladder, the protagonist is a Vietnam vet beset by visions of demons. The movie later suggests that he's really dead and in limbo, or on the verge of death, having never survived Vietnam.
In Ray, Ray Charles suffers from hallucinations about his dead brother.
In Holes, as Stanley is being led by bus to the camp, he stares out the window and briefly sees Onion Sam with his donkey. Later in the film, the dying Kate converses with the dead Sam outside her overturned wagon. Given the movie's supernatural overtones, it's possible Sam's spirit is really present.
In Go, one stoned character thinks a cat is talking to him.

Literature

In The Pale King, some IRS examiners who strain themselves to remain focused and alert in the face of extreme boredom are visited by phantoms that embody extreme stereotypes of the repressed aspects of their personalities. Macho guys see drag queens, neat freaks see filthy people, etc.

Live-Action TV

In a couple of episodes of Scrubs, dead or dying friends of the characters are hallucinations.
The title character in the Lost episode "Dave" is Hurley's hallucination.
- Sorta. Mostly. Watching in retrospect, it seems the Dave in the flashbacks was a hallucination, while the Dave on the island is an apparition of the Smoke Monster, attempting to get Hurley to kill himself.
The Sarah Connor Chronicles has Sarah hallucinating long-dead Kyle Reese as she tries to get a bullet removed from her leg. Possibly brought on due to her medical condition.
In an episode of The Inside, Rebecca, injured and dazed from a plane crash, is helped through the woods by what she thinks is the little girl whose family she's trying to save, but who turns out to be a hallucination of herself as a child.
House. House hallucinated Amber for a while, which turned out to be very entertaining.
"You're not Leoben." "Never said I was."
In Dexter, Harry Morgan has progressed from a Flash Back character into a hallucinatory Spirit Advisor for Dexter. Given the state of Dexter's mind, it's not clear whether he is literally seeing Harry, or if he's merely the avatar for an imagined conversation between the two.
- Dexter would appear to be a psychopath/have an antisocial personality disorder. Nowhere is he shown to be actively psychotic.
In Farscape, Harvey is a Not-So-Imaginary Friend implanted in Crichton's mind by Scorpius. Even after the device causing the hallucination is removed, Harvey sticks around, much to John's consternation.
Grey's Anatomy: |Izzie Stevens]] hallucinates the ghost of Denny Duquette due to her brain tumor.
In Monk, Monk sometimes talks to a hallucination of his dead wife, and one time when he's trapped on a submarine, he has imaginary conversations with his psychiatrist.
In season 7 of Supernatural, the wall Death puts in Sam's mind breaks down. That, of course, leads to him seeing Lucifer follow him around, throwing around suggestive remarks and trying to convince Sam that he's still in the cage with him. Didn't take too long for it to shift into the first type.

Video Games

In Silent Hill 2, Maria is James' hallucination. Maybe.
No way around the spoiler here - Viktor Reznov in Call of Duty: Black Ops.
In the "Valley of the Mad" scenario in Rise of Legends, Giacomo starts going loopy and the rest of the army has to defend him until he gets over his madness. Among other things he is attacked by hallucinatory chicken monsters during the scenario.
The Dead Space series has a lots of hallucinations but the most prominent one? Nicole.

Western Animation

In the series finale for Avatar: The Last Airbender, Azula hallucinates her that her mother is talking to her, while giving herself an insane haircut.