At Ethan's Halloween party, he began turning everyone into what they were dressed as, however the mask was removed, when a combination of Ethan (who had been changed into Jakeward the vampire from Dusk) and Benny (who had been turned into a more powerful wizard) and then Benny blasted the mask off with a lightning spell, and the spell was broken, and no one remembered being changed.
The mask was incredibly powerful, however it needed someone to wear it, to lock into its power, it could transform anyone into what they were dressed as, both physical and mentally, if the person they were dressed as possessed any supernatural powers or skills, then they would gain them, for instance when it turned Ethan into a vampire, he also gained all a vampires powers. It also turned Sarah into Rechelle (Jakeward's love intrest) so she might have been turned back into human for a short time since Rechelle was a mortal from dusk (Made more likely by the fact that in this form she was seemingly powerless). There didn't seem to be a limit to how much power it could give, nor a limit to how they would change. It could literally manipulate reality, mind and matter. However if removed all its changes would be undone, however it required a bolt of lightning from an incredibly powerful being to remove it.