I am currently using the Bukkit 1.3 Beta Build. I have also tried this bug on all previous builds, and it still persists to happen. The Bug: What happens is when a player dies, and then another player dies before the first player respawns, then, the second player respawns right after the first one respawns. The first player will then be invisible to the second player. I have tried this bug with no plugins at all and it still happens, so it must be a bukkit bug (No, it's not a vanilla bug either, tried it with vanilla too). I will upload a video or screenshots of it if needed. Please fix this bukkit!
This is a common bug, usually if the player is invisible until the other player walks about 10-20 blocks away and back the ...invisibleness... will go away.
I've had that issue as well. Very annoying. I also had one player on my server, and whenever he would teleport to a player or warp, he died. Strange....