Probably not, their visual cortices are way too underdeveloped. Their visual representation of the world -- define it as you will -- is probably incredibly simplistic.
damgo: hallucinations are results of an abnormal level of neurotransmitters. If insect brains could achieve a point where the neurotransmitters are at an abnormal level, then yes insects can hallucinate.
Well as far as I'm concerned an hallucination involves (but is not limited to) the distortion of the cognitive maps that form a representation of reality built from core consciousness and the various perceptual functions. Given that spiders don't possess core consciousness or cognitive maps I would have to say that spiders cannot hallucinate.
If on the other hand you want to say that what constitutes hallucination in spiders is them getting f*cked up on drugs and their web weaving ability goes down the crapper then OK.
I must have a very different idea of what constitutes an hallucination. To me most hallucinations seem to be simply a case of incorrect data analysis, where the brain recieves corrupted signals, or perhaps uncorrupted signals but analyses them wrong. Most hallucinations are probably as simple as seeing flashes of colour that aren't actually there, or sensing vibrations that didn't actually occur say.
If the above is correct then I believe spiders could very well experience hallucinations. Sure they are nothing compared to the kind of hallucinations humans experience when on drugs such as LSD, but the could affect the spiders web making abilities.