Schizophrenia and other psychotic disorders are to a certain extent an issues of taxonomy or "naming a bundle of behaviors or symptoms". Something of great importance that one can never fully grasp is how real these hallucinations appear to the person with psychosis. If we were to grasp this a bit better, we might find new ways of dealing with these schizophrenia and other psychotic disorders. The auditory, olfactory, or visual hallucinations that someone with psychosis experiences are "half real or true". To them these illusions they see, smell or hear are just as "real" as what we experience.
This is based on a theory of perception called "representative realism" which states that we as humans cannot perceive the world as it is "intrinsically" So we need the mediation of our senses and other phenomena. As an example, suppose you see a brown coffee cup on the kitchen table, well first off, color has no existence apart from a triangulation with light, the rods and cones in our eyes, and some quality of the molecules that provide an unknown reflective causal connection to the degree that when our senses and minds are presented with these molecules we see the brown coffee cup. (by the way color has no existence apart from sentient beings who have the ability to interpret light waves as what we call color). click here for more on representative realism and its relationship to schizophrenia and other psychotic disorders.
So this causal connection between the image of a brown coffee cup which our mind sees and the molecules in space and time is what gives a positive truth value to the proposition "There is a brown coffee cup on the table in front of me". Now here is where it gets interesting. To a psychotic person they may see a brown coffee cup on the table and it is as real in appearance to them as it would be to us; however, there are no molecules that exist in place of the coffee cup which posses this causal relationship with the image to ground it in reality. None the less they do see half a truth. Their mind and senses see an image which is part of the perception process. What is schizophrenia and other psychotic disorders.
The whole point of this is that when a psychotic person sees, smells, or hears something, it is usually not some wacky alien from space but rather an image; only this image doesn't have a causal relationship to a cluster of atoms or molecules.
This is why it is so very difficult to convince someone with schizophrenia and other psychotic disorders that what they see isn't real because to a certain degree; it is real, it just lacks the causal relationship. This relationship gives a correspondence to what their mind perceives and what is in the extended world - thus reality. This is one of many theories of perception; however, one that seems to do an adequate job of explaining the mediation between the mind and the extended world and how difficult it is to convince someone with schizophrenia and other psychotic disorders that what they see hear or smell isn't real because it is in fact "partially real". Maybe with this knowledge we can learn how to get through and teach someone how to discern the differences, if even possible.