There is a very compact display that surfaces in conversation from time to time that seems about as close to a holo-deck as we're likely to get anytime soon. It's called a head mounted display or "HMD". Basically it's a pair of small LCD displays with a bit of optics arranged to create a large virtual image for the user. While this is undeniably impressive as it stands, it becomes even more impressive when combined with a set of position sensors that can determine where the user is looking and relay that information to the graphics system. The graphics system continually updates the displayed image to track the user's point of view. With this sort of system, if you turn to the left you see what's on your left. Look up and you see what's above you. It's the holy grail of the virtual reality world.
Too bad it doesn't yet work for our sims.
No, not you. I'm referring to those true believers over there. The ones with tiny beads of blood forming on their foreheads. The ones with foam on the corners of their mouths. The ones breaking key tops off as they paw their keyboards trying to crawl into their computers and through the web so they set fire to a heretic. (This is one of the few times I'm glad I have a long narrow pipe to the web.)
I didn't say it wouldn't work. I said it doesn't work...
The pieces are all there, but the overall coordinated performance of the combined system just isn't. The resolution is in most cases adequate, but the response time is too slow to create a suitable illusion of a totally immersive environment. Actually, it worse than that, many people experience motion sickness, sometimes severely. Kinda hard to hold on to the serenity of "slipping the surly bonds of earth" when you feel like puking your guts out.
This motion sickness is caused by sensory mismatches. Typically it's a lag in movement of an image relative to the corresponding physical movement that leads to problems, but any sensory input that's out of wack can potentially cause disorientation, tension, sweating, and the urge to hurl. It's a serious problem. The military uses HMDs both in training and in operation. A person using an HMD in a simulation might overcome the disorientation, effectively accommodating to the mismatched signals, and as a result be set up for disorientation during real operations when the sensory signals are suddenly correct but different than the sim. There is an interesting article in the April/May 2002 issue of Air & Space titled (I kid you not!) "Barfology" by William Gregory. Check it out if you'd like to learn more about this nauseating subject.
I don't want to leave you with the impression that HMDs are totally unusable. Within their limitations they are really quite neat. You may even be one of those people who are not prone to simulator induced motion sickness, which for you at least, would move this evaluation from "really quite neat" to "extremely cool". The landscape of products and manufacturers is continually changing. Even the consumer grade HUDs are rather expensive and don't seem to generate adequate market volumes to keep the product line alive. In some cases, like that of InViso, this means the end of the company as well. Stereo3d.com is an excellent web site if you want to look at the extremely wide variety of systems that have been made available over the years. The topic of head mounted displays is a fascinating field, one with great promise far beyond simply being an output device for games. If you would to learn more about it, a good place to start is by reading "Augmented Reality: A New Way of Seeing" by Steven Feiner, published in the April 2002 Scientific American. If this just whets your appetite for more, take a look at "A Survey of Augmented Reality" by Ronald Azuma, and "Recent Advances in Augmented Reality" by Azuma, Baillot, Behringer, Feiner, Julier, and MacIntyre. If you're specifically interested in military HMDs, take a look at Helmet Mounted Displays: Design Issues for Rotary-Wing Aircraft.
A superficially similar, but actually completely different technology is the use of LCD "shutters" worn as glasses. The shutters are synchronized with the frame rate of a CRT monitor such that each eye is allowed to view only every other frame. The monitor alternately displays scenes for the left eye and then for the right eye. By presenting a different perspective to each eye, an illusion of 3D is created. Panoramic views are rather limited if a monitor is used, however this approach can be used with projection systems if the video response is fast enough. Currently LCD displays don't work well for this as there is too much hold over from frame to frame.