It wouldn't have been possible with the Oblivion engine. There's a player duplicate command, but I can't think of a way to code instructions/behaviors/AI into the player duplicate. It'd just stand there unless attacked. Not much of a distraction, really. Maybe Skyrim's CS coding and engine will be different enough to allow it? (Or, more likely, maybe there's people with more creative coding skills than I!)
As mentioned above it was already done in Shivering Isles where you had to fight your own clone and from what I remember of Oblivion's coding, it wouldn't be that hard, worst come to worst just create a custom player duplication function and assign it to some generated NPCs. I think the bigger issue would be making it so the clones can't actually hurt anything, the only way I could think to do it off of the top of my head is to assign them all weapons with 0 damage and no enchantments, but that'd require a customized version of EVERY weapon, a gruesome task at best and would still leave issues like they could still disarm/paralyze/knock down enemy. Say all of this, it is not that I ever tried to make such a spell; I did mess around with it a bit. I tried my hands at creating a few custom spells (one would raise targets up 10,000 units for example) or custom summon spells. I also made a few custom triggers for chests/etc but nothing overly complicated, as I just wasn't planning to release a mod back then. For skyrim I might just think about making a few custom mods, so if this isn't implemented in the game, I might have a crack at it myself anyway. I have another idea of something I want to try anyway.
As for duplicating the player, duplicating the model might take a bit of work, but most of assigning the players stats and items to a random NPC really isn't hard at all, just a bit time consuming, IE Player.DuplicateAllItems
and using get(base)AV and setAV to set the stats... however for a mirror image you'd probably only want to set strength high (to avoid burden issues) and copy speed so the mirrors move at the same speed as the character.