The powerup is hinted at by Zom Zom as a "free gift" after buying 5 costumes from any of his shops. Using collectabells, buy at least 5 costumes from any of his shops. Once you do, you will be dropped down to a hidden floor, where Zom Zom gives you a tutorial on the Illuminator, which you can finally put into your Sackpocket.
The Illuminator when activated, will shine a beam of light in the direction it is pointed at. Besides its use as a flashlight, it also serves as a tool for finding hidden prize bubbles. Scattered around Bunkum are pictures that have a "wavey" texture and an object. These paintings contain prize bubbles, which can be obtained by shining the Illuminator at them. Once shined at, the object in the painting will then "pop" out of its shell, perform movement, which causes the prizes to be revealed. Once the light isn't directed at the painting, the object will then retreat back into the painting.