During a code review, I recommended changing a return value from IList to IEnumerable. Is there any real difference between these two interfaces?

In fact, there is one huge difference. IList (and ICollection) both support insertion to and removal from the collection. When you return these interfaces, you are saying:

Here’s a collection of items. You can modify the items and the collection itself.

The owner of the collection has no easy way to know if the collection has been modified (ObservableCollection).

In contrast, IEnumerable doesn’t support insertion to or removal from the collection. The collection itself is immutable. When you return this interface, you are saying:

Here’s a collection of items. You can only modify the items.

That’s a big difference, especially if the owner of the collection needs to know if the collection itself is modified. Unless performance considerations (for direct indexing) trump maintainability, I prefer to return IEnumerable for collections.