Invisible creatures are visually undetectable. An invisible creature gains a +2 bonus on attack rolls against sighted opponents, and ignores its opponents' Dexterity bonuses to AC (if any). See Invisibility, under Special Abilities.
Marius, Scholai Armsmaster Says: An Invisibility spell can provide a free sneak attack to a rogue. More deadly by far is a rogue with Improved Invisibility, who sneak attacks with every attack for the duration of the spell. Invisibility is also useful on indirect spellcasters who summon monsters or empower their allies rather than attacking their enemies. Since only an attack will break a normal Invisibility spell, such a spellcaster can easily remain unseen for an entire battle. There are several spells that can counter invisibility, most notably See Invisibility, Glitterdust, Invisibility Purge, and True Seeing. If none of these tools are available when you face an invisible foe, consider leveling the playing field. Retreat to a dark area or create plumes of smoke as concealment to make your enemy suffer a similar disadvantage.