Rogue Hide/Sneak is invis vs live or undead NPCs as far as I can recall. I played a Rogue on Live 5 years, though I had SoS for quite a bit of that time, so it is possible I could be mistaken (though I am pretty sure that is correct).
If NPCs are seeing through hide/sneak it most likely means they are set that way in the database. There are fields for seeing through hide/sneak and SoS as well. I doubt that is how it is set from the PEQ database, so it is probably an issue that needs to be taken up on the Irreverent forums. Most likely, you probably won't start seeing many mobs that see through hide/sneak until you reach the higher levels like 50+. After that point, it is pretty important to have SoS, especially once you reach PoP+ zones. With SoS, there is only a small percent of NPCs that can see through it. At least up to the content I played through (up to 2005).
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