http://ddowiki.com/page/Phantasmal_Killer
"You create a phantasmal image of the most fearsome creature imaginable to the subject simply by forming the fears of the subject’s subconscious mind into something that its conscious mind can visualize: this most horrible beast. Only the spell’s Foe can see the Phantasmal Killer. You see only a vague shape."
http://ddowiki.com/page/True_Seeing_(spell)
"You confer on the ally the ability to see things as they actually are."
True seeing should let you see that the image is fake and thus make you immune to the effects of the spell. Change the description or change the spell. It doesn't make sense as it stands right now.
Edit-
Being a fear based effect (in the description at least), fear immunity should also make you immune to it, and effects that gives a bonus to resist against fear should also give a bonus against this.
The descriptions and the actual effects are completely inconsistent.