Here's the effects of using the Stealth skill to hide:
Hide Your Stealth check is opposed by the Perception check of anyone who might notice you. Creatures that fail to beat your Stealth check are not aware of you and treat you as if you had total concealment. You can move up to half your normal speed and use Stealth at no penalty. When moving at a speed greater than half but less than your normal speed, you take a –5 penalty. It’s impossible to use Stealth while attacking, running, or charging.
So, basically, any creature that doesn't beat your Stealth roll with a Perception check is "not aware" of you, and you have "total concealment" to them.
Here are the requirements for using Stealth normally:
Being Observed If people are observing you using any of their senses (but typically sight), you can’t use Stealth. Against most creatures, finding cover or concealment allows you to use Stealth. If your observers are momentarily distracted (such as by a Bluff check), you can attempt to use Stealth. While the others turn their attention from you, you can attempt a Stealth check if you can get to an unobserved place of some kind. This check, however, is made at a –10 penalty because you have to move fast.
Having HIPS effectively erases this line. Cover/Concealment are only required because you need to be "unobserved" to use Stealth normally, so the end result is as follows:
- You are in a situation where you can use Stealth (more than "being observed" can nullify the use completely, though those rules are not all covered under Stealth).
- You roll your Stealth.
- All beings with a chance to observe you roll Perception. If they roll higher than your Stealth roll, then they still see you, as normal.
- All beings who failed their Perception rolls are unaware of you or your location. If someone makes a random guess at your location and attacks there, they have a 50% chance of missing, even if you are there. "I know he's here somewhere" is up to GM discretion.
Nothing new happens with Stealth, except that you can hide, without moving, with twenty guards staring right at you, with no justification whatsoever other than "I have the right Rogue Talent." It's not Invisibility (you can stack those), but its close enough that you're probably stealthier than the invisible wizard.