I'm making his FAQ thread to explain what you need to know when it comes to rushing new characters in game. Time and again I've had to explain the same things over and over, the most common mistake newbies make that causes the rush to become troublesome. Once you are aware of the circumstances of rushing players, you can avoid a lot of hassle by following these simple guidelines.
Q: How do I observe another player who wants to rush me?
A: Go into the party screen (by pressing the P key) and click on the magnifying glass icon of the player you want to observe. This is labeled "Click to observe a player".
Q: I don't see the icon you're talking about. Where exactly is it?
A: This is most likely because you have decided to connect to Annihilus by the typical way of altering the Gateway section of Diablo 2's registry key, instead of actually installing the Annihilus Launcher. Unfortunately, this is why you cannot see the observe icon in the party screen. You must install the Annihilus installer to fix this.
Q: Why do I crash while observing a player?
A: This can be for a variety of reasons, and is dependent on the circumstances. The most common instance is when you are observing a player who is to complete the Eve of Destruction quest for you (killing Baal, the final boss). If you observe a player from the moment he begins from the final waypoint, you will crash at random for an unknown reason. The cause of this crash has been reported. To avoid it, you must only observe a player when he begins to fight Baal's minions in his throne room.
Another cause of crashing happens when the observer presses other hotkeys other than to chat. The only keys you can press safely while observing is Enter and P.
Q: After you killed Baal, I didn't get Nightmare/Hell unlocked, or crashed. Why is that?
A: Unfortunately this is a worst case scenario, forcing a new character to make a new game and try again. There is little that can be done to workaround this. What appears to contribute to the problem is after you rejoined the game after a previous crash, you observed the player that was rushing you before joining the party. Please don't do that, as it may also be a glitch. There is also the chance that if you somehow crash after you observed Baal being killed, you may or may not get NM/Hell unlocked. In this case, all you can do is start a new game and try again.
A: Update: You should try relogging back into the realm, and you should see the next unlocked difficulty. If you still did not unlock the next difficulty somehow, you must make a new rush game and try again.
Q: Why is my view off centered after I spectated someone / killed a boss?
A: This has been reported and will be fixed in an upcoming patch. The only thing you can do is respectate someone again and unspectate to recenter your view. Afterwards, rejoin the game to see if the change has worked.
Q: If I am spectating someone, they appear frozen in place or bugged!
A: This is one of several bugs with Observe mode, and is one of the more harmless ones. You are still getting experience and quests done for you, nevertheless.
Q: After I quit observing someone, my character goes invisible!
A: As above, this is another harmless bug, and rejoining the game / respectating will fix it.
Please be aware that these are an ongoing issue that has been reported and will be corrected in later patches if possible. Until then, play it safe and you can avoid unnecessary headache.
-Xardas