The difference between virtual reality and augmented reality

It's probably worthwhile clarifying what virtual reality is not.

A sister technology to VR is augmented reality (AR), which superimposes computer generated imagery (CGI) over views of the real world. Limited uses of AR can be found on smart phones, tablets, handheld gaming systems such as the Nintendo 3DS, and even in some science museum exhibits, which overlay the CGI on top of live video from a camera.

The latest innovations in AR are the AR headsets, such as Microsoft HoloLens and Magic Leap, which show the computer graphics directly in your field of view; the graphics are not mixed into a video image. If the VR headsets are like closed goggles, the AR headsets are like translucent sunglasses that employ a technology called light fields to combine the real-world light rays with CGI. A challenge for AR is ensuring that the CGI is consistently aligned with and mapped onto the objects in the real-world space and eliminate latency while moving about so that they (the CGI and objects in real-world space) stay aligned.

AR holds as much promise as VR for future applications, but it's different. Though AR intends to engage the user within their current surroundings, virtual reality is fully immersive. In AR, you may open your hand and see a log cabin resting in your palm, but in VR, you're transported directly inside the log cabin and you can walk around inside it.

We can also expect to see hybrid devices that somehow either combine VR and AR, or let you switch between modes.