Have you been declaring to each other which is the illusionary models then!? It doesn't need an umpire. Just make a (secret) note on your play sheet which model is the illusion. And when your opponent engages that model and blows are exchanged you can declare the illusion as appropriate. That seemed pretty straightforward and obvious to me as well.
Joe has said that you have to tell your opponent which one is the Illusionary Soldier (I think it's in the FAQ thread).
That said, it's still a useful spell. The IllSol can "find" the Fools Gold (as it disappears when touched, not picked up), can lure wandering monsters into the opposing warband, can tie up enemy spellcasters and/or bowmen in combat and can provide the multiple combat bonus. And of course, the IllSol still fights, and can win combat, so can push opponents back - with good placement can even push off building (which means the fall causes the damage, not the IllSol).
So it's a good spell, you've just got to be creative in using it.
http://leadadventureforum.com/index.php?topic=80899.0