Incorporeal

Definition
Incorporeal creatures cannot be easily hit with normal weapons, which suffer a 50% chance of automatically missing the target. Ghost Touch weapons avoid this penalty, as do weapons wielded by a player wearing an item with Ethereal (Ethereal Bracers, Spectral Gloves), or Ghostly (Wretched Twilight, level 16 or 20 Cloak of Night) properties.

Implementation in DDO
There's no such thing as touch attacks in DDO, which is how incorporeal undead attack in D&D. To compensate for this, developers gives them very high to-hit bonuses to simulate it. They can miss, but it takes substantial Armor Class to get it to be reliable. (discussion thread)

Incorporeal Monsters
Incorporeal creatures include:
 * Quells
 * Shadows
 * Spectres
 * Wheeps - Only those found in Accursed Ascension
 * Wraiths

These monsters are affected by Incorporeal bane weapons.

Player Characters as incorporeal
Players can gain an Incorporeal miss chance via:

10%
 * Feywild Tap (Elf enhancement) - 10%
 * Ghostly (item enchantment) - 10%

25%
 * Ghostly Essence (Shadar-kai enhancement)
 * Shadow Veil (Ninja Spy 3rd core enhancement)
 * Shadow Form (Shadowdancer epic destiny)
 * Shroud of the Wraith (Pale Master 4th core enhancement)
 * Walk with the Spirits (Primal Avatar epic destiny)

35%
 * Shroud of the Wraith with Improved Shrouding (Pale Master T5 enhancement)