Here's a good article about the moon illusion from NASA's Science@NASA series

"On Saturday night, June 30th, step outside at sunset and look around. You'll see a giant moon rising in the east. It looks like Earth's moon with the usual craters and seas, but something's wrong. This full moon is strangely inflated. It's huge!
You've just experienced the Moon Illusion"...Read the whole article here

http://science.nasa.gov/headlines/y2007/27jun_moonillusion.htm
-- 
Jane Houston Jones
Senior Outreach Specialist, Cassini Program
JPL - 4800 Oak Grove Drive, MS 230-205
Pasadena, CA  91109  818-393-6435
jane.h.jones@jpl.nasa.gov
Cassini SOC http://soc.jpl.nasa.gov/index.cfm
What's Up? http://education.jpl.nasa.gov/amateurastronomy/index.html