In a comment last week, JB asked: Have you ever thought that perhaps schizophrenics are in a permanent state of delusion, much like someone on LSD or some other hallucinogen?
This very view dominated psychedelic research in it's first ten years, this notion that LSD mimicked psychosis or schizophrenia. It wasn't until the 1960s that a different paradigm emerged to describe the effects of psychedelics, when people who weren't researchers started to use them recreationally and, echoing their use throughout history, sacramentally.
In fact, I disagree with the inherent premise of the question, that LSD and other psychedelics create delusional thinking. People seldom become delusional on LSD; certainly it can happen and certainly this aspect of LSD seems to be very similar to what many people believe the experience of schizophrenia to be like. But overwhelmingly it's the wrong metaphor -- for both psychedelics and schizophrenia.
The most interesting work with psychedelics arises from their use in illuminating aspects of the physical, emotional, spiritual, or metaphysical world we live in. Schizophrenia, on the other hand, is pretty much defined by the inability to accurately perceive one of more of these aspects and the concomitant inability to function in the real world. Psychedelics like LSD can be extremely useful in sensitizing therapists to the "real feel" of schizophrenia by illuminating the kind of extreme shifts in consciousness experienced by those suffering from the disease. But therapists should never forget that their ability to distinguish psychedelic effects from "normal" consensual reality sets them apart from true schizophrenics.
Interestingly, in the early years of LSD research (1950s and early 1960s) LSD was explored as a treatment for schizophrenia. Check here for an overview of some early, extremely promising research with schizophrenic children. Can you imagine the brave soul who would ask to try out such research today?
Unfortunately, all research was abruptly halted in 1966 when politics overrode science and LSD was outlawed. The extraordinary potential of these substances remains tragically underexplored, although groups like the Multi-Disciplinary Association of Psychedelic Studies (MAPS) are doing yeoman's work in fighting for funding and approval for research into these substances. A brief perusal of their site gives hope that we are entering a new age of psychedelic exploration.