The computer graphics community still has people working towards a goal of virtual reality (Problem 1: First define reality). There's a lot of different parts that need to go together to create the whole (software, hardware, psychology, interface, equipment, etc.) and things are still clunky looking and not very exciting at the moment. VR might not eventually look anything like our first anticipations, but it's still around, though often with new goals (augmented or mixed reality instead of the immersive virtual reality, for example). The old VR is dead, long live the new Virtual Environments, which I believe is the new term. And so on.