Furthermore, though the size of the moon does not change, the angle subtended by the moon at the horizon in the vertical dimension is, in fact, smaller than when it is high in the sky. This is not an illusion.
--Daniel
Technically, I believe that optical illusions are divided into 3 main types:
Physical illusions, which are optical effects caused by the physical properties of light and the interaction of light and objects (eg the way a stick appears to bend when it enters water due to refraction; heat ripples; mirage)
Physiological illusions, which are caused by the physiology of the eye and neural processing of visual information (eg. the blind-spot effect, false-color after images, etc.)
Cognitive illusions, which are caused by the cognitive interpretation of visual information based on learned and assumed experience (eg, pictures that shift between a duck and rabbit depending on how you interpret the picture; distortions caused by false perspective).
The visual angle subtended by the moon at the horizon would fit neatly as a physical illusion. The illusion that the moon appears to be larger at the horizon is a cognitive one.
John