I have posted something on this in the GM section, but I think its also worth asking here for a rules clarification on this power.

For a free action, and a reasonably low casting value, you disapear, and reappear within 10 meters of yourself. This is explicit in the text and so I am taking this as correct. I have no problems with this.

However I am having my player interacting with things while he is "invisible" as well as moving the fake image of himself around and pretending to do things with it, to distract people etc. I can see nothing in the rules which confirm or contradict his use as there is no mention of what you can do.

Do you become visable if you do an action? Can the image do anything, other than stand about? Any thoughts?

This issue was dealt with in the errata, it now functions in a very different manner:

Distort Vision on page 166 should have its description
changed to: “With this power your physical form distorts
and you almost fade from view. Your precise location
becomes extremely difficult to discern, and until the start of
your next turn all attacks against you suffer a –30 penalty to
hit. Characters with the Blind Fighting Talent only suffer a
-10 penalty. A successful Challenging (+0) Psyniscience Test
removes this penalty for the attacker. Sensory equipment
based on standard optical sensors are fooled by this power;
ones that read thermal patterns, use motion sensors, or rely
on some other form of detection are not. Creatures and
sensors that do not rely on sight are not affected by this
power.”

Ah okay, all becomes clear now. Thats very usable, thank you xenobiotica!