Aren't those shadow people just the neighborhood perverts? :p

No, seriously, I think a lot of 'strange' sightings are based on unconscious expectations and indeed not being able to categorize what we see internally. I'm sure that until we really find an UFO wreckage, people will keep seeing UFOs according to the 'standard' expectation model of a flying saucer.

Doesn't mean they are real.

Anyways, good post, the human psychology behind illusions and how people react to them interests me a lot.