Okay, I guess I better step in on this one.
We call it trace, which is actually different from vapor trail which is visible to the naked eye, but looks kind of similar. Trace is "always" there, but easier to pick up in certain lighting conditions. As was mentioned above, there is a pressure that builds in front of a bullet as it travels down range, this pressure actually will cause distorion of the light. This distortion causes a visible "wake" to be seen if you are lined up just right and with GOOD optics. If you have bad optics that isn't transimitting much light, etc, you will have a hard time picking up the trace. If you are the shooter, you will not see it, not after recoil. So, here are few tips to learn how to pick up the trace, and once you see it, it becomes very easy to pick up.
As the spotter:
1 - Line up to the side of, and slightly behind the shooter. The idea is to try and get as close as you can to directly behind of and in line with the rifle. Do NOT touch the shooter, just get as close as you can. (never disturb the guy pulling the trigger.
2 - If you have a variable power spotting scope, put it on 20x, this seems to be the ideal mag for picking up trace and field of view.
3 - Adjust your site picture so the target is in the bottom portion of your field of view. This helps pick up trace as the bullet "lobs" in to the target.
Make sure the spotting scope is focused, and then pay attention. If you are engaging targets under 200 meters, you generally will not be able to pick up the trace.
Mirage is a completely different topic, and is bad for target picture, but good for estimating wind.
MEL