Yes, Tony is Danny's imaginary friend. I've not read the book, only seen the movie (like four days ago) and from what I gather off such high-brow places as Wikipedia, Tony was a lot more of an independent entity in the movie.

What fascinates me so much about the movie is the thematic use of colours and of mirrors. It's just amazing, and I wanted to slip a bit of that into the text here. I think it worked, with the duality of human nature and that.