I've created one thief before and I am doing it again now. My previous character was a Khajiit that dual-wielded swords, and snuck around with bows and daggers. I am considering doing the same thing now but I am deciding whether or not I should incorporate Illusion into it. I usually like to focus on one main school of magic, reguardless of my character, but I'm not sure how to approach it. On my last Khajiit, who really didn't use anything other than fast-healing had only 150 pts of magic by level 40. Does anyone know a good build for an Illusion thief, or does Illusion not suit them well and I shouldn't bother?

i kind of did what you did, but backwords, i built a full mage, who specialized in stealth.. so at early levels it was all about "calm", because it let you sneak around for those crit hits easier. Now.. its ALL about muffle/invisibility , maybe even paralyze, but dude, when you go invisible/muffel then come up behind some guy and slit his throat, only to disapear again, it feels BEAST..

Illusion is nice, but if you don't want to actually use the school, but would still like a nice invisibility spell, which is one of the major reasons to use Illusion with a thief in the first place, just get the Shadow stone which will allow a once a day 60 sec invisibility cast. If you we4re more interested in the psychological AI manipulation of illusion though, then I guess just go for it. Ive had an Illusionist build before, although he wasn't a thief per say, just a Vampire, Illusionist that happened to be sneaky, and crafty, etc.

I'd like to use it for more than just invisibility. I'd like to be able to use calm and cause chaos with fury(and their stronger versions). Do you have any recommendations for how much I should raise my magicka, which perks in the tree I should pick, etc?

All of the perks that raise level of enemy effected by spell, are good perks. Id go something like 200-250 Magicka. Really depends on what all spells in the school your looking to use, since the way the perk tree is lined up, you have to take certain perks that effect a spell, you may not even be interested in using, like Rally for instance.