Positive Technology Journal

Via Tom's hardware guide

Virtual Reality Therapy (VRT) offers treatment using simulated real life experience provided in a confidential setting. VRT has shown its effectiveness in several common phobias, including claustrophobia, fear of heights, fear of spiders, fear of driving, fear of flying, and fear of public speaking. As a person goes through the VR program, the therapist teaches the client relaxation techniques to deal with the symptoms provoked by exposure to the virtual environment.
However, until recently, the use of VRT was severely limited by the lack of inexpensive immersive equipment. This opportunity could come along in the fourth quarter of this year, when 3001AD, a company that builds high-end VR machines for large-scale entertainment centers, will introduce a headset that can be used in combination with the Xbox and the Playstation game consoles and several blockbuster game titles. The system, called "Trimersion" and recently demonstrated at the E3 trade show, promises 360-degree head tracking, uses a binocular video subsystem and delivers a QVGA resolution (320 x 240). Mark Rifkin, senior vice president of 3001 AD suggested retail pricing to come in just under $500.

More to explore:

Cybertherapy.info the reference site for VR therapy

Virtual reality in behavioral neuroscience and beyond, Nature Neuroscience, 1089-1092, Oct. 2002

Virtual Reality Therapy, Harvard Mental Health Letter, on-line, April 2003

Fake worlds offer real medicine, Journal of the American Medical Association, 290 (10), 2107-2109, 22/29 Oct 2003