Will o' the wisps are tiny swamp-lights located all over Tirannwn and some parts of Morytania and the Tree Gnome Stronghold. They primarily serve to add scenery and atmosphere to RuneScape. As of the graphical updates to Morytania, the will o' the wisps there use green particle light.
Before the fairy rings were added, will o' the wisps would appear in many places around RuneScape, other than swamps. These locations are where fairy rings are now. Since they were replaced, it is suspected that they were markers for Jagex to go by.
If a player stood under a Will o' the wisp, another player would not be able to see them. The player would remain invisible even though the Will o' the wisp's glow fades in and out. This is similar to the effect of a player's Pet covering up another player when the pet and other player are standing in the same square.