Muggles' Guide to Harry Potter/Magic/Disillusionment

Summary
The Disillusionment Charm allows you to either become temporarily invisible or temporarily unnoticable, depending on how well it is cast.

Extended Description
The Disillusionment Charm makes you blend in with your surroundings to a certain extent; depending on how well it is cast, it can make you nearly invisible.

Mad-Eye Moody casts this charm on Harry in Harry Potter and the Order of the Phoenix when he and the Advance Guard are transporting Harry to the Headquarters of the Order.

In Harry Potter and the Deathly Hallows, we learn that many Invisibility Cloaks are made by casting Disillusionment Charms over ordinary traveling cloaks. A number of other techniques are used as well. None of these techniques are perfect; physical and spell damage, or simple age, will cause them to fail.