As for chameleon, I'm pretty sure at 100% chameleon your still visible, chameleon just decreased the distance that a mob would notice you. 100% meant you could get quite close but you would still be seen from several metres away if you were not sneaking, it worked well in conjunction with sneak, but does not replace it. Chameleon did not give you bonus sneak attack damage, unless you were also sneaking, and lets face it, that was what you used sneak for, the damage.
If you hit something with or without chameleon, the mob became alert, but often the AI was too dumb to know which direction the attack came from and so they just stood there. That mechanic could use a tweak, afterall if you have an arrow sticking out of your left side, odds are the enemy was to your left. When the mob "heard" you but did not see you they already did move in your direction to try and find you, but I think they made sight and sound checks too heavily relied uppon, and failed to add in basic inteligence such as the direction the attack came from.