This is a copy/paste from what I said on another thread. A sticky would be nice!
A good way to figure out if someone is wallhacking is by using demos! In fact, any sort of extrasensory perception (ESP) is easily observed with this method - with just a few console commands! First, get into spectate, and record a demo that is around 10 mins long - just to make sure. Make sure you say you are going AFK, so they do not expect you are actually spectating. Do not talk, respond, or do anything to make them aware of what you could be doing. MAKE SURE YOU SPECTATE THEM IN FIRST PERSON VIEW!!!! When you are done, kick yourself with the reason "AFK for too long." Don't forget steam IDs! Then, open the demo file in console by typing "playdemo <demo name>." Then, press Shift+F2 to open the demo playback menu. Pause the demo. Go into console and type "sv_cheats 1" and "mat_wireframes 1." Alternately, you can type "sv_cheats 1" and "r_drawothermodels 2." This will give you a "wallhack" that allows you to se the wireframes of other models and players. Now, look for the player aiming at enemies directly and constantly, especially behind walls. If the map is dark, or you have a hard time seeing walls, type "mat_fullbright 1" in console to light everything up.
There you all go! hope this helps.