I had a post on this 01/06/08 or close to that date "can't see IR flask my A....", check out the pics.
I actually had this same deer several weeks in a row come back to the same location, so I don't think it spooks them all that much. I do think they can definitely see it as I have many other pics of deer checking it out. But they all seem to stick around. They can definitely here it switch from Color to IR mode if they are around at dusk. Hope this helps.