Working in VR, the state of the art is closer to Pong than to the Holodeck or the Matrix. That doesn't mean there aren't useful applications for the technology but we won't see anything that passes for reality in my lifetime, or perhaps ever.
> but we won't see anything that passes for reality in my lifetime, or perhaps ever
maybe not that passes for reality, but VR already has a powerful "reality feeling" even with the crappy resolution we have now
Get someone to load a VR game and try to walk off a cliff - they'll find it very difficult to do. Even someone that's played a lot of VR will have to override their instincts to not step off.
Presence is possible, although my experience is that things like the cliff effect get less potent the more you use VR. You have to be a willing participant though to buy into the alternate reality and agree to play within the rules. True interactivity is what's really lacking and the thing we're furthest from being able to simulate. Reality just has an astounding amount of detail when you can interact with it rather than just look at it.
None of this is to say that VR can't be useful, valuable or entertaining (I still work in the field and believe in its potential) but we're nowhere near the Matrix and maybe that's not a bad thing.
