Does Stealth make units stealthy?

[Optimizer]

Allright, I know that the Stealth flag makes air units harder to intercept.

Somewhere I read that Stealth units can be seen only by nearby units, and not just when they entered enemy territory. Is that true?

If it is, the Stealth and Sub flag together would be really useful for undercover units like guerrillas, saboteurs and scouts.

[zulu9812]

The Stealth flag only affects an air unit's chance of being intercepted or shot down. The Invisible flag (previously known as Submarine) allows land and sea units to be invisible to enemy units.

[WarpStorm]

Just a note of warning, using invisible on ground units is a bit buggy. If one of your attack units (as in has a non-zero A), enters an invisible ally's square, you will get a warning something like "Are you sure you want to start a war with...". If a unit thas has a zero attack (for example, a worker), then you get no warning and immediately "sneak attack" your friend (with your worker). I've seen this happen enough times to know it's real.

I think the only reason that it works write for ships is that none of them have a zero attack.