All entities are invisible. Players cannot see each other, mobs, paintings, shot arrows, thrown entities (snowball, splash potion), falling blocks (naturally: Sand & Gravel), placed down boats, primed TNT, and item frames.

You can hear the entities move, explode, and do their natural sounds, but cannot see them. I know they're there because you can kill them with flint and steel or lava, and they can damage you. They drop loot, but nobody can see it, but it can be picked up, if you randomly walk over the (invisible) dropped item.