The Nearby feature will show only the silhouette of unknown/uncaught Pokemon. I noticed that those silhouettes are always at the top of the Nearby list, which is nice if you want to complete your Pokedex.
If there are no silhouettes shown in the Nearby list, does this mean that there are no unknown Pokemon in my vicinity?
(I had a silhouette in my Nearby list but was too busy to mark it or go after it. One minute later, when I was about to go after it, it wasn't in the list anymore. I think that means it wasn't there anymore, so I didn't go to the Pokestop and check.)