Typically used with: Insight.
In short: figure it out. Discern is all about sizing up a person or situation. A powerful general stands high over a battlefield deducing his opponent's objectives. A judge hears a defendant's case, and then determines if he's telling the truth. A powerful wizard sees through the disguise of an assassin posing as one of his servants. All of these are perfect examples of the use of the Discern skill.
You can't retry Discern checks; you either figure it out or you don't. However, you can try to Discern something different about the same subject.
When another character attempts to deceive you, using either a Bluff or Disguise check, you must make a Discern check to see through their falsehoods. If you meet or exceed the other character's check, you can tell fact from fiction. If your result is lowest, you believe the lie, but it doesn't necessarily mean that you trust the liar wholeheartedly.
When someone impersonates a specific character, and you actually know the person being portrayed, you gain a bonus to your Discern check. This is based on your Disposition toward the one being impersonated.
Estimating is useful for determining the number of troops on a battlefield, revealing the market price of a gem, guessing a woman's weight, or figuring out how long building a ship will take with six laborers. A roll of 5 means you're not close at all, a roll of 15 means you're pretty close, a roll of 30 means you've got it exactly down to the last decimal place. Characters should include ranks from an Occupation which is relevant to the estimation (e.g. a farmer can estimate when crops are ready for harvest, a sailor can estimate the travel speed of a sailboat).
Also, with a successful Discern check, you can figure out specific things about people you meet. A result of 10 will get you comparative skill (they're better/worse/as good as you at something). A result of 15 will get you style specifics (e.g. the clothes they wear indicate they practice fire magic). A result of 20 will get you limited statistic information (e.g. a ballpark of how many Health Points remaining, what percentage of their Magic Points are drained, what's the neighborhood of their Endurance score) A result of 25 or over gets you specifics — one stat (e.g. attribute, skill) per roll.
You can make a Discern check to figure out others' mood, goals, motivation, or reasoning. By reading body language, tone of voice, behavior, and other social clues, you can figure out why a person is performing an action, how they're feeling about a situation, or what their next move may be. The higher your roll, the more specific or accurate your gut feeling. This works just as well in combat as it does conversation, and it works just as well for allies as it does enemies.
If your result is 5 or higher, you can determine a creature's Disposition toward yourself or another creature. Unless, of course, they're hiding their true feelings, in which case you need to reveal their deception as described above.
When another character attempts to improve your feelings about himself or another, you can decline the friend request. You must make a Discern check to oppose a Negotiate, Perform, or Seduce check made to improve your Disposition. Creatures of a bestial nature must make a Discern check to oppose an Animal Control check for the same purpose. If your result meets or exceeds theirs, your Disposition remains unaffected. If their result is higher, your Disposition improves one level for each 5 points of difference. If the opponent makes a Critical Failure, your Disposition toward them actually worsens one level.
A character can also attempt to worsen your bond deliberately. They make a Taunt check to worsen your Disposition and you must make a Discern check to avoid being offended. If your result meets or exceeds theirs, your Disposition remains unaffected. If their result is higher, your Disposition worsens one level for each 5 points of difference.
You can ascertain the strategy of entire armies. If your Discern check exceeds the commander's Leadership check, you can determine a single aspect of the battle strategy before it unfolds. Some of the possible information one could Discern from battles include: a place, object, or person a combatant is guarding; the next plan of attack; a likely escape or fall-back point.