Fashion illustration spans from the technical point of view (flat patterns and whatnot) to the more fine art point of view. Up until the 1950s/1960s, fashion illustrators often created advertisements for not only fashion houses/magazines, but infiltrated all forms of visual advertisement.
Fashion illustration was huge in pre-1960s before fashion photography replaced it. Since then, it has been dwindling downwards. Couture-houses relied on fashion illustrators to create their garments on paper (with a little fabric swatch to describe the detail), with technology becoming more advance - Couture houses began sending video tapes of the shows instead of illustrations (around the 1980s I believe). Thus, fashion illustration died.
Today, it hardly exists. But, like fashion in general, trends from the past come back through a reinvented and more modern form.
James Jean (a very popular contemporary illustrator) collaborated with Miuccia Prada for her Spring/Summer 2008 collection. The illustrations were apart of the advertising, the garments themselves, his illustrations created their shoes, they used his color pallet with Miuccia's sense of tailoring, a motion graphics piece was created. Miuccia Prada also created 2 outfits for the female protagonist in Appleseed Ex-Machina, an animation set in a futuristic world, with war/violence and peace.
Takeishi Murakami collaborated with Louis Vuitton, a sweet twist between the signature LV handbags with Murakami sensibilities fused together. A small anime short was created. I remember going to Murakami's gallery in Little Tokyo in LA, which featured huge displays of LV + Murakami prints, accessories and artwork.
Julie Verhoeven collaborated with Versace for their Spring/Summer 2009 collection. Her artwork served as prints for Versace's summer dresses.
In the late 2000s, the line separating fashion, digital animation, illustration and art was blurred. Whether you liked these collections or not, this was first step for fashion and illustration to take a HUGE leap into the fashion world since the 1960s.
It manifested itself with entertainment and contemporary illustration. It's not necessarily fashion illustration, but serves as an even greater form of collaboration between artists and fashion designers. The NEW fashion illustrator.