Muggles' Guide to Harry Potter/Magic/Invisibility Cloak

Overview
An invisibility cloak is a cloak designed to conceal its wearer. It is made of a special type of material that makes its occupant invisible. When nobody is inside it, it looks like a silvery, almost transparent fabric.

Extended Description
Invisibility cloaks are very rare, but Harry receives one for Christmas in his first year; it turns out to have been originally the property of Harry's father, and was given to Harry by Professor Dumbledore. Harry uses it a number of times in the books, whenever he needs to go somewhere unobserved, often with one or more of his friends; he does note that it is a mixed blessing, as it hides you from vision, but you still have to be careful about making sounds or bumping into things or people.

Alastor Moody apparently owns two Invisibility Cloaks; Sturgis Podmore is wearing one of them when he is arrested in the Ministry, and Arthur Weasley is wearing the other when he is attacked by the snake, in Harry Potter and the Order of the Phoenix.

Analysis
The invisibility cloak is the perfect device for moving around undetected. As Harry often has the need to break rules, he needs a device such as this and an invisibility cloak seems like the perfect choice. Unlike the Disillusionment charm, which makes an object a near-perfect chameleon, the invisibility cloak makes the object transparent, and can only be pierced by magical – or possibly cat – eyes: Professor Moody's magical eye seems to be able to see through it easily, and there is the suggestion that both Mrs. Norris and Crookshanks can sense Harry under it, though in fact the cats may be hearing rather than seeing the passage of those within. Peeves also senses Harry, Ron, and Hermione under the Cloak in Harry Potter and the Philosopher's Stone, though it is obvious that he is hearing rather than seeing them. Additionally, in Harry Potter and the Chamber of Secrets, Professor Dumbledore looks right at Harry and Ron underneath the Invisibility Cloak while in Hagrid's hut, suggesting that Dumbledore might actually be able to see through the Invisibility Cloak. Dumbledore had hinted at this ability in Harry Potter and the Philosopher's Stone, when he caught Harry in front of the Mirror of Erised.

Greater Picture
It is noted elsewhere that Dumbledore is able to make himself invisible without using a cloak; Dumbledore says this himself in Harry Potter and the Philosophers' Stone. And yet, James Potter left his invisibility cloak in Dumbledore's care. What need of an invisibility cloak would Dumbledore have? The author has stated that this is an important question to ponder.

In Harry Potter and the Deathly Hallows, we learn that this is because James Potter's Invisibility Cloak is, indeed, something special. Talking with Xeno Lovegood, the Trio learn of the possible existence of the three Deathly Hallows. Xeno reminds them that most Invisibility Cloaks are either simple traveling cloaks to which a Disillusionment Charm has been applied, or are woven out of the hair of a Demiguise, but all such become damaged or fade into visibility with time. Only one Invisibility Cloak, the third of the three Hallows, and supposedly the Cloak of Death himself, does not suffer the ravages of time, and cannot be damaged by magic. Harry, Ron, and Hermione are uncomfortably aware at this point that the Cloak in Harry's possession matches this description perfectly.

It turns out that Dumbledore, in his youth, had heard the legend of the three Hallows, and had been trying to find them. Though his active search for them had stopped by the time he was a teacher at Hogwarts, his youthful obsession with them had never completely faded, and he had borrowed James' Cloak, once he had heard of its properties, because he recognized it as a Hallow. It was while he was examining it that Voldemort killed James and Lily, and tried to kill Harry.

There is some question as to exactly how functional an Invisibility Cloak is, given that Alastor Moody's magical eye can see through it without difficulty, Harry's presence on the Marauder's Map is not changed by his being under his cloak, and Nagini evidently can see Arthur Weasley in the Ministry. In the latter case, however, we note that a careful reading of the text would suggest strongly that Arthur has fallen asleep and the cloak has slipped partially off him. As such, we believe that snakes (notably pit vipers, who have infrared sensors as well as eyes) may be able to detect the presence of someone under a cloak, but only by the heat they radiate; it is unlikely that they can directly see the person under the cloak. There is no mention of Voldemort having added extra senses in his efforts to make himself appear more snake-like.

On Professor Dumbledore's ability to sense Harry underneath the Invisibility Cloak, we believe that Dumbledore is actually being rather more devious than we expect him to be so early in the series; we learn, gradually, as the story arc progresses, exactly how little of his knowledge Dumbledore is allowing to escape. We feel it is most likely that Dumbledore is actually not perceiving Harry under the cloak, but rather is using Legilimency to see what Harry is seeing, and working backwards from that to determine where he is. We suspect Professor Snape attempts to do this as well, in Harry Potter and the Deathly Hallows.

It is noted also that Dementors are not impeded by Invisibility Cloaks. It is noted that Invisibility Cloaks only stop one from seeing someone who is wearing it; Harry, for instance, has difficulty making his way through the Hogwarts Express, while wearing his cloak, because of the extreme care he must take not to bump into anyone or step on feet. Since Dementors do not have eyes, the senses they use to detect and identify people must be somehow other than visual, probably related to the mental effects they have on people. Clearly, these senses are not stopped by Invisibility Cloaks.

From the above, we believe that an Invisibility Cloak will completely shield the user from anyone else's eyes. The few exceptions that we have noted are Moody's magical eye, and those artifacts and creatures that use something other than eyes to perceive the individual. (Note that Moody's magical eye likely is, in fact, just such an artifact. Moody, being nearly paranoid, would charm his magical eye with any additional information-gathering charms he could, and if the Marauders can do it with the Marauder's Map, it is extremely likely a wizard of Moody's ability could charm his Eye the same way.)