On the ladder until my last game, I rarely saw hallucination abilities, if at all. This leads me to believe that it is not very effective overall. So my question is, can it be effective? If so, in what situations?
Hallucinated phoenix are very good scouts. Hallucinated Archons are great tanks, or for charging void rays before a battle.
If your opponent doesn't have detection, you can often fool them with a few hallucinations to bulk up your army. Idra famously left a game after his opponent added some hallucinated void rays to his colossus/stalker death ball, so it does work at the pro level too!
Mutalisks will tend to run away from Archons if they see them, so having some hallucinated archons in your minerals lines might be enough to deter harass, especially if you have some real ones too!