Stage hypnosis can encompass several types of performances.
The most obvious is probably the stage shows you see at the fair, in a club, at a corporate event or even at a graduation party. The hypnotist tests the suggestibility of the audience members then brings those who most likely to put on a good show up onto the stage. From there the comedy begins, with routines that demonstrate hypnotic phenomenon in a humorous way. At it's best it's hilarious, fresh and a fun experience for all. At it's worst, it's demeaning, predictable, not funny and even dangerous.
Another type of stage hypnosis is the hypnosis demonstration. In this type of performance, the purpose is to educate, rather than to entertain. Hypnotic phenomenon takes front stage and the comedy takes a back seat. In this type of show, the purpose is for you to walk out with a better understanding of what hypnosis is and more importantly, what it is not.
The final category is the seminar presentation. The purpose of this type of performance is once again educational, but in this case, hypnosis is only used to prove a point about some other topic. A classic example is a performance given before a group of salespeople, where hypnosis is used to show illustrate how a mindset can have a large impact on the success or failure of a sale.
In stage hypnosis, the hypnosis is real, or at least it should be. It's highly unethical to plant "shills" in the audience, but it does happen.