While on faculty at the University of Michigan, I focused on studying the emotional effects that are created using Virtual Reality (VR). My primary interest was to differentiate between the effects of "the real world" (in-vivo) and the virtual world. I studied this by taking people with acrophobia (fear of heights) and exposing them to height in either a real building or a virtual simulation of the same building. Such exposure is a traditional and well studied treatment for helping people overcome their fear. More details are available from my published papers, but overall I found a wide variety of responses: some people seemed to respond much better to exposure in VR than in-vivo, others much worse. Brief writeups of this work appeared in Michigan Today (back in the Spring 1999 issue, Vol. 31, No. 1) and the Detroit Free press (in their archived Health section Feb 13, 2001).
Subjects in my study experienced virtual exposure in a CAVE virtual environment at the University of Michigan Media Center, now the Duderstadt Center. This is a 10x10x10 foot room where the walls are 3-D projections generated by a computer. The ability of a person to walk around in the simulated building, while still able to see the therapist with them was an important component to making this experience as realistic as possible.
The computer world was created in collaboration with the UM virtual reality lab with the help of students in the Engineering 477 class (Principles of Virtual Reality), which I served as a faculty advisor. Their project reports are still online, for both the creation of our acrophobia environment and for an arachnophobia environment.
If you are interested in finding more about this area of research, an excellent source of the latest research is the journal Cyberpsychology and Behavior, now renamed Cyberpsychology, Behavior, and Social Networking, to keep up with all the new variations of virtual experience.