Took me a while to get to grips with pickpocket, but stick with it and the rewards are high. Pickpocketing experience increases with every item you steal. and the more valuable the item, the more experience gained.
You CAN successfully steal items from people's pockets even while being detected, with people staring right at you. Being undetected does increase your chances of success, but don't feel that you have to be utterly invisible to stand a chance of succeeding.
Start off by stealing petty items such as food, drink and spare clothes that people are carrying. The guards are an ideal target to start off with, as there are many of them and they practically never notice their arrows disappearing. Keep an eye on the % next to each item - the higher the number the easier the item is to steal.
Gems and jewellery will give you tons of experience, so aim for them once you have improved a little. This is also a chance to gain some free enchanted items!
You only really need to upgrade the light fingers perk once or twice to increase your chance of success for stealing better items.
The cutpurse perk makes stealing gold easier. The more gold you steal, the more experience you gain. Once you have this perk, try paying for lessons then stealing the money back from the tutor and watch your levels shoot up!
The extra pockets perk increases your carry weight by 100 - VERY useful!
Key master is quite useless, as keys are easy to steal already, so ignore that perk.
If you do decide to aim for level 100 in pickpocketing, you can unlock the perfect touch perk - this allows you to steal equipped clothes and armour right off people's backs, so you can see them naked!