You can detect the auras given off by living and undead creatures. If you have Life Sense as an Imprecise Sense, you can detect which square(s) a living or undead creature is in if it is within range of your Life Sense.
If you have Life Sense as a Precise Sense, you can not only detect the location of such creatures but also make out the finer details of their auras, such as what their limbs are doing, where their eyes are looking, etc.
Life Sense is specifically unable to detect Constructs, as they do not have a life-aura to detect.
Most Spirits are detectable by Life Sense, though some Spirits can be so diffuse while in their Demesne as to make it impossible to detect where they are.