Revealing mistake: After Lucy discovers Mrs. Bradley in her bed, as she fights off and runs from Patricia, it is obvious that she wears knee pads for these shots.
Revealing mistake: As the three babies fly towards Mrs. Waterhouse, when they land on her it is blatantly apparent that they're merely three dolls in this shot. She actually grips two from behind and the center doll is attached to her as she moves backwards. Also, in the shot facing the babies the center baby is in the bouncer seat with the rod attachment overhead, yet, in the shot facing Mrs. Waterhouse the rod attachment is gone. (00:23:50)
Revealing mistake: At the Fairwater Tuberculosis Sanatorium, when Agent Dammers shoots Frank in his left arm, the white wrapping around his arm, where the bullet holes appear, is visible under Frank's short sleeve. (01:36:05)
Revealing mistake: At the Excalibur Restaurant, when Ray's ghost gets angry at Frank he knocks over a wine glass with his hand. When the wine glass starts to tip over, the cloth under it moves and lifts up a bit to obviously tilt the glass towards Frank. (00:36:40)
Revealing mistake: In quite a few shots it is obvious that Michael J. Fox's dark-haired stunt double drives the Volvo or does particular stunts. (00:06:15)
Revealing mistake: When Frank, and later Ray, are shooting the water pistol, in the majority of the shots nothing is actually coming out when something is supposed to be.
Revealing mistake: The scar near Agent Dammers's left eye changes shape and position throughout the film. (00:41:15 - 01:35:25)
Revealing mistake: A squib (a small explosive device) is seen on Frank's arm when Dammers shoots him.
Chosen answer: For the most part, the actors playing the ghosts were shot separately on blue-screens, and then comped into the scenes. (By removing the blue background through a process called "color keying", and placing them over the scenes) They were simply given a blueish glow and made semi-translucent to complete the effect. It was pretty cutting edge back in the 90's, but nowadays, it'd be very easy to make the exact same effect using a simple program like Adobe After Effects.
TedStixon