I hated how in OB, any percentage of chameleon made you absolutely invisible to your eyes but not everyone else. Or in the case of Hrormirs Icestaff that is stolen from the mages by the theives guild, it has a 5% chameleon effect on target as well as the frost damage (I asume to simulate the visibilty lost in a blizzard) but the damn thing made enemies full invisible as opposed to 5% faded. If I remember correctly, morrowind pulled this off quite nicely and I hope they refix it in Skyrim.

Yeah, that always annoyed me. I always carry a detect life ring on my current character.

I think that light defraction effect was too much. Without that defract effect, actors are pretty visible semi-transparent.
Hopefully TES5 will have better effect with DX11. Win-XP users would be still stuck with Light Defraction tho.

That annoyed me too in oblivion but not what I thought about when I read the thread title, I also did not like how much Chameleon could break the game, 100% chameleon (or ~106% with 95% spell casting effectiveness) would make the game too easy as you could repeatibly sneak attack near enough EVERYTHING, this also made the invisable spell rather redundant. I'd like both of them fixed to be honest, Chameleon should be more limited and it's effect should match the power of the spell.

I hated that, what is the point of invisibility when they look right at you.

You should be able to walk past anyone and steal something so they can turn around and NOT see you but feel frightened because they felt something touched them.

I hope they limit chameleon at 85% or something similar.

remove it

I like chameleon and don't think it should be removed, just improved. Maybe fix the AI so that in a 100% chameleon scenario, enemies would themselves use Detect Life on you and still see you?

And [censored] I hope they fix the active camo effect to be progressively increased, like has been said, morrowind did this right.