My own opinion of Einsteins Statement 'time is an illusion' is that what he meant was the Newtonian idea of 'absolute time, unchanging'. That one is indeed an illusion when comparing 'frames of references'. But on the other hand, Newton was absolutely correct if we just stick to what we can measure directly, without comparing it with other sources.

It's a little like expecting Einstein to have refuted QM as a theory. He was uncomfortable with some of its ideas, and he didn't accept it as the 'final answer to life the universe and all' but he did accept it.

"On the basis of quantum theory there was obtained a surprisingly good representation of an immense variety of facts which otherwise appeared entirely incomprehensible. But on one point, curiously enough, there was failure: it proved impossible to associate with these Schrodinger waves definite motions of the mass points - and that, after all, had been the original purpose of the whole construction. The difficulty appeared insurmountable until it was overcome by Born in a way as simple as it was unexpected.

The de Broglie-Schrodinger wave fields were not to be interpreted as a mathematical description of how an event actually takes place in time and space, though, of course, they have reference to such an event. Rather they are a mathematical description of what we can actually know about the system. They serve only to make statistical statements and predictions of the results of all measurements which we can carry out upon the system. (Quantum Mechanics, Albert Einstein, 1940)

Albert Einstein Quotes on Quantum Physics: Quantum Mechanics, Theory of Light, Quanta, Particle-Wave Duality, History and Evolution of Quantum Theory. "It seems to be clear, therefore, that Born's statistical interpretation of quantum theory is the only possible one. The wave function does not in any way describe a state which could be that of a single system; it relates rather to many systems, to an 'ensemble of systems' in the sense of statistical mechanics." (Albert Einstein, on Quantum Theory, 1936)

All attempts to represent the particle and wave features displayed in the phenomena of light and matter, by direct recourse to a space time model, have so far ended in failure. And Heisenberg has convincingly shown, from an empirical point of view, that any decision as to a rigorously deterministic structure of nature is definitely ruled out, because of the atomistic structure of our experimental apparatus. (Quantum Physics, Albert Einstein, 1954)

Albert Einstein Quotes on Quantum Physics: Quantum Mechanics, Theory of Light, Quanta, Particle-Wave Duality, History and Evolution of Quantum Theory "All these fifty years of conscious brooding have brought me no nearer to the answer to the question, 'What are light quanta?' Nowadays every Tom, Dick and Harry thinks he knows it, but he is mistaken." (Albert Einstein, 'The Born-Einstein Letters' Max Born, translated by Irene Born, Macmillan 1971)

I still do not believe that the statistical method of the Quantum Theory is the last word, but for the time being I am alone in my opinion. (Albert Einstein, 1936, 'The Born-Einstein Letters' Max Born, translated by Irene Born, Macmillan 1971)

And he said one very wise thing. "I think that matter must have a separate reality independent of the measurements. That is an electron has spin, location and so forth even when it is not being measured. I like to think that the moon is there even if I am not looking at it."

I'm sure almost all of us agree on that one. Matter exist, as the moon, very much so.

Here's a nice paper on

thermodynamics and time