Final answer:
Dust in the Interstellar Medium causes starlight to undergo reddening, due to the scattering of blue light, and interstellar extinction, resulting in stars appearing fainter due to the absorption and scattering of light.
Step-by-step explanation:
The dust in the Interstellar Medium has two main effects on starlight: reddening and interstellar extinction. Reddening occurs because dust scatters blue light from stars more effectively than red light, making stars appear redder than they actually are. Interstellar extinction happens because dust grains both absorb and scatter some of the starlight, causing stars to appear fainter to observers on Earth.
Interstellar dust can be detected in several ways, including the blocking of light from stars behind it, and it also emits heat radiation detectable in the infrared spectrum. The dust grains themselves are approximately the size of the wavelength of visible light and are composed of either carbon-rich or silicate rocky cores with icy mantles.