Are there actually "maphacks" out there? I don't see how this is possible but a lot of people seem to be talking about them. Personally I would never use them and I think they ruin the game. But, are there such things as map hacks? If so how do you report players using them? Most important what are tell-tale signs of someone using them?
Yes they do exist. There are some tell-tale signs as you can go into the replay and see what your opponent was looking at the given time. Due to this some signs are:
If you notice them staring at your base for long period of times when they don't have vision.
They jump to the location of your army moving out, once again without having vision.
They view the location just as you start expanding, once again without having vision.
Best way to see if someone is doing it is just view the replay and put on their vision. It is usually very obvious if they are using a program to remove the fog of war.
Are there actually "maphacks" out there?
Yes. You can find them rather easily by googling - some of them cost money, so the authors want lots of people to find out about them.
I don't see how this is possible..
Understanding why this is possible (and why Blizzard cannot prevent it) requires a basic understanding of how peer-to-peer games (like Starcraft) work. I've written a fairly comprehensive answer regarding that here.
What are tell-tale signs of someone using them?
The most common method of detecting hackers is watching the replay, and seeing if your opponent selects any units he can't actually see. Since this is impossible without maphacks, that would mean he's maphacking.
Another, less reliable method is to watch the opponent at the start of the replay. Often, unknowledgable maphackers will center their screen on your base at the start of the map, or multiple times throughout the match, before they ever actually "discover" where your base is.
Of course, both of these things can be avoided by the maphacker, so neither is fool-proof.
How do you report players using them?
Click on "Report user" in Battle.Net and post the replay, with an explanation.
There is maphack out there without tell-tale and come with observer menu. In the observer menu you can get all the information you want without jumping to opponent base, such as technologies, number of army, money & gas etc. Its also warning you in advance when your supplies is low, opponent building dark temple, banshee and airdrop.
This maphack is not free, it cost $10/month.