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it makes him go insane and jump around screaming Banquos name. the ghost is a manistation of his guilt for killing him. he can not get rid of his guilt so he hallucinates that Banquo is following him.
Macbeth had just hired assassins to kill off Banquo and Fleace, so at the beginning of Act III, Scene iv--the banquet--Macbeth's guilt causes him to see Banquo's ghost. This scene is significant because it shows the decline of a person who tries to take fate into his own hands by killing other people. Also, this is a dangerous situation for Macbeth because it is when he publicly shows that he is unwinding mentally. It also shows that Lady Macbeth is out of the loop with her husband's decisions and where she was once in control, she is now losing it. Again, this is certainly a turning point in the play.
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