Damage to the senses.  Unlike psionic damage, which is a direct
mental attack on the mind, illusionary damage is to sensory inputs 
(be it sight, sound, taste, touch, or a combination thereof).  It is the
shimmering mirage, the mirrored reflection, the burning sensation of
the flesh (without actually burning).  Illusion is associated with Fire
and Air elements.  Armor has no effect against illusion damage.