There are books that could help you understand it more than an individual person here but being that I have made a full recovery from schizoaffective disorder (read through my posts) which is schizophrenia with a mood disorder I'll explain it as best I can. Firstly a person has hallucinations (which are usually auditory thus "hearing voices" but can be in all 5 senses) and delusions (things that are not there in real life that they believe), that can sometimes be paranoid (fears of persecution). Those are called positive symptoms (not as in good but as in things that are there that shouldn't be). Negative symptoms are another class of symptoms that involve avoiding people and not being able to initiate social contact. Cognitive symptoms are the inability to process and understand information. The other symptoms can occur in other psychiatric disabilities but hallucinations and delusions are specific to schizophrenia (or other disorders with psychosis such as bipolar with psychotic features). There are also subclasses of schizophrenia. The DSM-4 is the psychiatric manual that describes it in full but for a standard understanding there are many books on it. Google "Understanding Schizophrenia".
A summarized way to remember it is in a nutshell it distorts a person's perception of reality and their cognitive processes and causes character trait deficits like avolition which causes all kinds of stuff like ILADVOCATE wrote. One day for example it got to where for me it was no different than when I was delirious from dehydration.
Yeah those are the most common hallucinations but I mainly have visual ones. A couple of examples I can think of off the top of my head was one time this song I listened to had all the notes echoed and I thought it was messed up and then listening to it later it wasn't like that at all and another time which is a weird one I was listing to the album Wish You Were Here and it had an entire section which wasn't even there anymore after hearing it that one time. I had some scary ones before.