What does it mean to be detected or raise suspicion in Thief?

When you are close to a guard or do something that will cause him to notice you you will see a white eye icon appear above their head. You are safe while this is filling, you remain undetected.

Even when the meter is almost full, you have not yet raised a suspicion.

Once the meter fills and three dots appear above it you have achieved "suspicion". You have not yet been detected since the guard is suspicious but is not sure there is someone there. Putting out torches near guards, making noise with throwables or arrows near them or other things that distract them will cause them to jump immediately to this level of alertness.

If you push it further the eye will turn Yellow, at this point you have been detected. The guard knows someone is there but doesn't know where you are.

If you attack a guard with a Yellow eye or he sees you the icon will turn Red, meaning he knows where you are and will start attacking or pursuing you.

There is also another state where the icon turns Orange with an icon that is slightly different from the Red eye. This seems to mean they are still actively pursuing you but don't know where you are. I've also seen guards jump straight from Yellow to Orange.

Raising a suspicion or being detected will both contribute to an opportunist playstyle.