What is the effect of Macbeth's increasing paranoia, and how else does Macbeth change throughout the play?

William Shakespeare's tragedy Macbeth is a study in the character development of an anti-hero.

When the play starts, Macbeth is a real hero—having just helped King Duncan's forces win a key battle that led to the defeat of the rebel enemy. Macbeth is rewarded with a new title: Thane of Cawdor.

Thanks to the witches' prophecy, though, Macbeth, and then Lady Macbeth, begin to burn for King Duncan's throne. They eventually achieve it with a sneaky, bloody murder. Although the murder creates the desired result—Macbeth quickly becomes king—the pressure begins to build on both Macbeth and Lady Macbeth in the form of paranoia.

Macbeth remembers the witches didn't only prophecy his rise to royalty; they also said that Banquo's "issue" (his children, grandchildren, and so on) would one day rule. Obviously, that means that at some point Macbeth or his lineage will lose the throne, so Macbeth immediately begins to worry about Banquo and Banquo's son Fleance:

To be thus is nothing;

But to be safely this: our fears in Banquo stick deep.

Macbeth then sets about planning the murder of Banquo and his son Fleance.

In Act V, as events begin to spiral out of control, Macbeth learns Lady Macbeth has committed suicide. This seems to be the final blow to his state of mind. Life has lost its meaning:

It is a tale

Told by an idiot, full of sound and fury,

Signifying nothing.

Macbeth is left with nothing but the over-confidence born of the witches' prophecy that "no man of woman born shall harm Macbeth," which of course turns out to be a play on words. Macduff reveals that he was “ripped untimely from my mother's womb” just before killing Macbeth.