The hallucinations are one severe, and rather rare, side effect of Ambien. They ask that you stop taking it immeditely and call the doctor when it occurs.
The most common side effects are drowsiness during the day, dizziness, feeling "drugged" or light-headed; loss of physical coordination; amnesia and forgetfulness; really vivid and messed up dreams; nausea; dry mouth; headaches and blurred vision.
I never hallucinated on Ambien, though as I got dependent on it, I developed massive headaches which persisted all day long. It also became difficult to find a therapeutic dosage as my body developed a tolerance to it. I ended up switching off between Lunesta and Ambien and supplementing it with another drug used off-label to get me drowsy.