I was watching one of Discovery's The Universe episodes, when this came up: Have you ever wondered why the moon appears larger when near the horizon? Is its apparent diameter actually larger? Or is it just a trick of the mind's eye? You can find the answer to this yourself, using nothing but a clear moonlit night and your own thumb!
Next time you have a clear night, go outside at moon-rise, preferably near full moon. Complete sun/moon data can be found at the US Naval Observatory, and the moon's phase can be seen on the upper right corner of this page. Now, look at the moon, which will rise in the East, just like the sun. Watch it as it rises. It certainly looks bigger than normal right? Find its approximate apparent diameter by holding your thumb out at arm's length. Note how large the moon is in relation to your thumb (a pencil also works well).
Now, go out a few hours later when the moon has risen high in the sky. Repeat this experiment, and note that the moon will be the same size! How could this be? It appeared much larger earlier, right? Some conclude that the atmosphere is acting like some sort of lens and making the apparent diameter larger. This is not necessarily the case. It turns out that the moon is the same apparent size, but our minds are playing a trick on us, an optical illusion of sorts. When the moon is near the horizon, your brain has something to compare it to, be it a building, a tree, or power lines. The fact that the moon appears much larger than these objects infers to your brain that it is large. Once the moon is high in the sky, however, your brain can no longer compare its apparent diameter with anything nearby, so it appears smaller! Give it a try!