rdanhenry: a dog or something similar will find you even if you're using your hiding skill, unless you take special measures.
On the other hand, if you not trying to stay invisible, you have more options. And if your stealth is skill based, you probably know some of the tricks for dealing with dogs and such. Furthermore, being invisible is much more suspicious than not being invisible. You can maybe talk your way out of a situation if you weren't so blatantly sneaking.
Similarly there are few occasions in which you can attack someone staying hidden.
Silent Kill. Remember, it isn't just that the person you are attacking knows you are there now. Your spell is gone. If you come out of hiding, it is trivial to go back. Casting Invisibility a lot drains PPs and risks spell failure (although, admittedly, the non-combat spell failure table isn't so bad).
And for magical means to detect you, there are magical means to detect people hiding with or without invisibility. Things you pick up do not become invisible... unless you cast an unseen spell on them (an action that does not break your invisibility).
But if you are using invisibility, there's no way anyone will consider you possibly innocent if you are found in anything remotely like a secure area. Whereas a Thief may attempt the "Whoops! I must have really taken a wrong turn!" ploy if he wanders into the wrong part of the castle and mistimes opening a door.
Items not becoming invisible when you pick them up was exactly my point. You either cast another spell (not "automatically" either, unless you are either a Mentalist or don't mind risking being heard) or you give up on picking the item up. Which means if you want to steal something, this is a real disadvantage.
Sure you have to pay attention when you're moving, but that's the only real limitation.
And if anyone is using any of the several spells to see invisible beings and you don't manage to blend in so that he doesn't realize you are invisible, you are instantly considered a thief or spy and probably executed on the spot, since you were being so blatant in your intent, whereas the various non-magical methods will typically at least present some opportunity to stall.
You need more spells to steal anything. If you are trying to evade a search, you need to stay in place, unless you can also Stalk -- the real advantage is those characters that combine stealth skills with the stealth-enhancing spells. They really are super-sneaky. Without stealth skills to back it up, invisibility is a good spell, but rather limited. In the low-magic world, where people are unlikely to suspect invisibility, it is certainly powerful, but in a high-magic world, the average soldier will know half a dozen tricks to handle it. But in a low-magic world, any fourth level spell is powerful.