application of physical laws in virtual space

Computer-VR objects and worlds should match with satisfactory accuracy to the tangible and other laws that direct such parts and environments in the tangible world. Some difference might be appropriate for fantasy applications, but if the difference is too great then the sensation of realism is forfeit. The site on ForceDimension has more developments on virtual reality.

"Augmented Reality" is a predominantly real-world setting within which a few virtual things are overlaid to expand the possible range or scale of operation of the physical world. Some examples are a surgeon using virtual reality to work on a micro level that could not be done with unaided human hands or a pilot with a see-through Head Mounted Display (head mounted display) that overlays maps on the pilot's range of sight to guide directional assistance. You may also see Virtual Tours Cincinnati, Ohio for more about virtual reality.

Also, VR Vacations provides useful information on this topic.