IIRC, the hallucination had a little help from Nash . . . 
Caution: Beautiful Mind spoilers ahead!
I took the fact that he interacted physically with the hallucinations as mostly a matter of his own “editing” of his memories. Did you embrace your husband when you got home from work last night? And the night before that? And the night before that? In my memories, I typically just have this sort of fuzzy placeholder: “Warm greeting.” The details of it are kind of sketchy. I may recall the event as having a hug, when maybe it did or maybe it didn’t.
It might have been a little bit cooler if Ron Howard had done the scrupulous work that Shyamalan did in The Sixth Sense, where you can go back and see that . . . (er, well, I won’t spoil it, JIC.) But at the same time, since The Sixth Sense, the twist-the-end has been overused in Hollywood lately, so perhaps breaking from the rigid application of that formula was a good decision on Howard’s part.
Also, The Sixth Sense was intended as something of a puzzle for the audience. There was one scene in the Sixth Sense where I really noticed that something odd was going on. Maybe if I was a little faster on the uptake, I might have figured out the twist. Indeed, Shyamalan included certain “clues” that the alert viewer might have picked up on, and enjoyed the experience even more for being in on the joke.
However, in A Beautiful Mind, we as the audience were experiencing Nash’s delusion along with him. We weren’t supposed to figure it out–that wasn’t the point. The point was that we had to confront, along with him, the fact that experience that seemed very real to him–and to us–in fact did not happen. So it’s not quite as important that a person, on the first viewing, should be able to pick up on the fact that some things aren’t real. In fact, it would detract from being submerged in the delusion. If the audience member thinks, “Hey! How come he’s drinking from that flask alone? Why doesn’t he offer it to his friend?” then later when the world comes crashing down, they aren’t as devastated by it. They can just smugly think, “Heh. I saw that coming.” Instead, they see Nash and Charles passing the flask back and forth, and think nothing of it–just two friends sharing a drink and conversation, and when it is revealed that the conversation didn’t take place, suddenly the memory is transformed into the haunting image of a man alone on the roof of a building, drinking and talking to himself.
Let me ask you, TheLadyLion, and anyone else who works with the mentally ill . . . were you bothered at all by the impression the film gave, that schizophrenia can be controlled by force of will? Okay, yeah, it’s a real story, but they glossed over a lot of the struggles that Nash went through (multiple hospitalizations and insulin shock treatments, for example) and kind of sneaked in the fact that he was indeed taking “some of the newer medications” in the end.
I feel like a person could probably walk away from that movie thinking that those who suffer from schizophrenia just lack the willpower to get their heads on straight, and medication is only necessary for the people who are weak or not as smart. That bugs me a bit.