While it's generally perfectly fine to humor your child and go along with her claims about the existence of an imaginary friend, there are a few ground rules:
-Don't let the "friend" be your child's only companion.
-Don't let your child shift responsibility for everything bad to the friend.
-Treat the friend with respect.
-Don't use the friend to manipulate your child.
Most kids lose their imaginary friends between their third and fifth birthdays. Sometimes the friends are forgotten, sometimes they're sent on a distant and permanent trip, and other times they "die" in a horrible accident.
(from familyresource.com)
Pretend friends rarely are a sign of emotional problems.If a child claims a friend is controlling her and making her do things she doesn't want to do, parents should seek psychological help.But if a child isn't depressed and has real-life friends too, pretend pals shouldn't cause concern.
In fact, parents should look for day care and preschool programs that

allow time for imaginative play so children can interact with pretend figures.
Even if parents discourage it, it's going to happen."
(from usatoday.com)

'Imagine me and you' (The Turtles, aka Frank Zappa and the Mothers of Invention). All our friends are imaginary. There is no one there!

I remember hearing somewhere that imaginary friends are just spirit friends who are open to the kids perception
because they are closer to the source
from the other side of the veil so to speak

@alan
great site,I'll make one later
(I should probably start acting my age )

@tidbit
if that's true,then no spirit friend wanted me as a kid
and since I've been not acting my age lately do you think I 've got a chance now?

So, this begs the question...

Can small children really see angels?

Do children sense ghosts?

Is there a dimension against this one that children can percieve?

this should answer a lot of your questions skwirl
http://www.crystalinks.com/

and you should enjoy this one too
http://fusionanomaly.net/

Thanx