At around 1:40 of the video from http://www.gametrailers.com/video/e3-2011-elder-scrolls/714852 You'll notice that when the PC enters "stealth mode" the cross-hair changes from its standard look to a dot with two lines protruding from the sides.
My speculation of this is that this is in fact an eye.
At the point where the PC first enters stealth it is closed completely, indicating that PC is completely hidden.
When said PC shoots the first victim at 1:56 (The woman) the eye opens slightly, half-open if you will.
It stays this way when the womans' companion enters "alert" status and remains as such until he is also dead at 2:01 and the word "HIDDEN" pops up, returning to the "closed" state when he is dispatched as well.
I'm guessing if PC would have been discovered by the bandits the eye would have opened fully to indicate that you've been discovered... It seems to fit, but I must say this is pure speculation on my part.
I haven't noticed anyone else mention this so I thought I'd give you all this interesting little tidbit.
Sorry if this is old new/already been known to the general forum going public.
Discuss?