I've worked for a suppressor manufacturer, documenting their field testing, here are some basic things about a modern suppressor:

1. Does not lower the muzzle velocity. Often increases a few FPS due to longer effective barrel. The bullet does not touch the baffles at all. No one makes a "shoot through" suppressor anymore, where you shoot through solid baffles with the first rounds.
2. Does not silence the gun. The sound is at hearing safe levels, but still quite loud. What that does though, is that locating you from the receiving end of the range based on sound is extremely difficult if not impossible. The supersonic crack of the bullet is a lot louder than the distant pop of the suppressed rifle shooting at you. This part is very realistic in the game. (Unsuppressed rifle shot still can be heard at medium distances, and this part basically fails in the game.)
3. Significantly reduces muzzle flash if not completely removing it. Same goes for ground disturbance, (flying sand etc), again making in much more difficult to locate you by looking. First round sometimes has more flash than the rounds after that, so that the 1st round has some flash and the rest have none. (This is "First round pop".)
4. Can be used in machineguns and .50cal rifles.
5. A suppressor made for machinegun can be used with extremely long bursts.
6. Does not make the accuracy worse, often improves it slightly.
7. The POI change is usually small, often in the class of 20mm at 100m. A rifle with long, thin barrel gets affected more than a one with short and thick one, due to obvious reasons.
8. Gets hot in repeated shot rifle use and very hot in machinegun use. ("Look at me!" in Thermals..) Looking through a scope when you have a very hot suppressor on the end of the muzzle = lots of mirage. Bad for long range. Not simulated in the game and not needed imo.
9. Rifle with subsonic ammo and a suppressor is really silent. Less sound than an air gun. Still it sends lets say a 12 gram 7.62mm bullet at just below the speed of sound, and therefore still has nice punch.
10. They are made of steel. You can break a lightweight one if you shoot 12 magazines full auto. A machinegun-suppressor on the other hand doesn't care about such minor things.
11. Increases the cyclic rate of full auto weapons due to increased back pressure to the gun mechanism.

Some videos:
http://www.youtube.com/watch?v=MvMBz6HeGf0
http://www.youtube.com/watch?v=4cGr2eriu_4

And to add as a footnote, I hope the rifle power would not be cut in half in a realistic game. I think that is a bit silly, when we have artillery that can wipe out a football field of enemies with one shot from 20km away.... :)

Here is a video I filmed a few years ago, of a 200 round burst with a light machinegun. In the start you can see a short clip of shooting standing up, the first few rounds start to climb the muzzle higher, then the shooter compensates for the rise and he would hit roughly the same height after that. I have many more videos with full auto assault rifles instead of a MG but I'm not in the position to release them since they were made only for product development use for the company.

http://www.youtube.com/watch?v=4cGr2eriu_4

Yes, volume differences in sound are weird. Explosions sometimes cant be heard from just few hundred meters away, whereas in real life a mortar/artillery round exploding rings for miles. And they have an awesome sound with the weird initial two-part thud when listened from far away, not present in any game for some reason! Here's the real deal (in bad quality): http://www.sounddogs.com/sound-effects/2224/mp3/438044_SOUNDDOGS__ca.mp3