In general, Mirror Image no longer blocks area affect attacks (e.g. fireballs). However, when attacking a mage with mirror image up Dragon Disciple's special firebreath ability does not damage the mage. Instead it removes an image.
Adt'l Info 1: Specifically this is the 3D8 version of the ability (the only one I've tried). Ability file "SPDD03". Adt'l Info 2: I modded in Fireball and Cone of Cold to double check. It's only the fire breath ability that is blocked by mirror image. Don't know why.
(Incidentally, until this is patched, is there a flag I can flip using Near Infinity to make this work right? Kind of nerfs mage battles, which is one of the abilities advantages (since it's not a spell).)