Just how many times did they show people using illusions to feign death? They showed Frigga using this ability, and casting illusions of herself, separately. They included a line that outright stated Loki learned his tricks from her. Obviously she is not dead. (Although the Asgardian funeral rites were very pretty.)
Loki's sitting on the throne at the end of the movie smirking like he just got away with something, after giving his brother everything he wanted. In fact, everybody has everything they wanted: Loki has proved himself to Odin and gained the throne, Thor gets to run off with the Avengers and Jane and not feel guilty about it, Jane gets Thor and a lot of interesting science, Erik Selvig gets to think Loki is dead -- everything is roses for the good guys.
Frigga, also, gets everything she wants: Loki's out of the dungeons, Thor's got a lovely girlfriend, Odin has regretted his impetuous rejection of his younger son and apparently resigned a throne that was clearly not good for him in his advanced age and health condition, her boys went on a quest together and used excellent teamwork to learn more about each other, succeed in their objective, and build a better relationship. I think she planned the whole thing, faked her death to give Loki a plausible motivation that his brother and father would accept, and now she and Odin have retired to some lovely country estate where they can spend their days in idle bliss and never have to host another damned banquet.
Probably Sif and the Warriors Three were in on it. At first I thought Loki might be, too, but the smirk says no, he was not aware of the fullness of this plan. I do hope she at least told him she wasn't dead afterward. Or maybe he thinks he talked her into helping him escape, and doesn't know about all the rest of it.
Poor Loki. He has no idea how devious his mother is.