Virtual reality uses computer technology to create simulated environments that immerse users and make them feel like they are experiencing a three-dimensional world. The document discusses the history of VR from flight simulators in the 1950s to commercial VR systems in the 1980s and 1990s. It describes the key components of a VR system including head-mounted displays, audio units, gloves, and tracking interfaces. Applications of VR discussed include entertainment, medicine, manufacturing, education and training. Advantages are its uses in safe simulation and virtual experiences, while disadvantages include costs and health issues with extended use.