THE BACKGROUND, THE SCIENCE
As a former psychology student, I developed an interest in experiments that alter a persons perception of their own body. There are experiments out there that can alter a persons sense of body-ownership the point where they feel that they are floating outside of it (link)(video, relevant experiment starts at around 30.00), that they feel they are in posession of a completely new body (link), and even an extra limb! (link). What is striking about these experiments is that they are extremely easy to set up with a piece of equipment such as the Rift, and that they have an extremely profound effect. An hour ago or so when a post on /r/oculus reminded me of these studies, it suddenly struck me just how important this can be for VR.
First of all, here is a youtube video of some of these experiments:
http://www.youtube.com/watch?v=8oF8sQvnTlM
THE GENERAL IDEA
All you have to do is to give a VR user some tactile feedback, and you can induce the sensation that they are their avatar. We're not talking about just immersion here, we're talking about a full blown change in body identity to the point where your brain tells you that the body that you see on screen is yours, in the exact same way that you think the body you're currently using is yours as well. Personally, this just blows my loving mind. With just a simple excercise, which can, in the lack of more sophisticated equipment be performed by a willing partner, you can make someone perceive their virtual body as more real then their actual body. Or, actually, not just more real, you can in fact completely suspend their unconscious ability to distinguish the virtual body from their own. Holee sheet.
This stuff also comes with some interesting mental side effects, which I imagine can be used for equally interesting gameplay mechanics.
First of all, in this study, it is shown that the effect is somewhat resilient. Even when shaking hands with their actual body, the subjects were still in posession of inhabiting the manequin they had been transported into. In this study, it is also shown that when you are in this transposed state, sensations perceived by your actual body are perceived as being experienced with your new, virtual one. The implications of the study that showed that you could induce the sensation of having three arms are also extremely interesting.
POTENTIAL APPLICATIONS
So what can you do with this?
First of all, what you can and cannot do with this is as far as I know a completely unknown field, ripe for exploration. There are so many questions whirling around in my mind about how far you can take this. For example, if you induce the sensation of having a third arm (which, if you didn't read the article, is done by prolonged simultaneous tactile stimulation of a real arm and a fake arm while all three arms are in view), can you keep that illusion up for the remainder of a game? If you feed tactile information into the arm used to induce the illusion, but give visual feedback that it is in fact the third arm that is being stimulated, will the user perceive that tactile information through said third arm? Imagine going through a game Zaphod Beeblebrox style, having an uncontrollable third arm that you have no control over, but whose sensations you actually feel, as if it really was an integral part of your body.
Also, the "out of body" effect seems as if it can be used for some really interesting stuff, especially for cutscene-like events.
Imagine that you're in first person view of an avatar that, thanks to tactile feedback, your brain believes is your actual body. All of a sudden your view drifts backwards, behind your character, and all of a sudden one of the ghost of christmas appears, telling you that he has some visions of your past to show you. In the process of doing this he repeatedly pokes you, you being the ghostly floating camera view point behind your avatar, while some tactile feedback mechanism does the same to your actual body, and all of a sudden you feel as you really are floating behind yourself, outside of your own virtual body. The ghost then takes your floating apparition on a tour of your past and tells you how naughty you have been.
I'm also curious about how far you can take the "body ownership" effect. Can you give a user the perception that they are occupying a body of the opposite gender? Of a preying mantis? Of a tentacle monster? Does it have to be a humanoid body? Does it even have to be living? This is some serious mind-screw material we are talking about.
The possibilities are, if not endless, at least mindblowing.
THE KICKER
But the best part about this whole thing, the reason why I'm making this forum post, is that you guys, you can do alot of this stuff RIGHT NOW. If you have a rift, you have a friend, and you have a way of hooking the rift up to an external camera, you can do the body swap and out of body experiments as soon as you gather all of those components in one room. Hell, you only need a friend, and you can do the "third arm" one! But you can also go further then that. If you use a virtual body, design a virtual object to poke it's chest repeatedly, put on a rift, and then look down at your virtual body as a friend pokes you simultaneously as said virtual body is being poked, you should theoretically suddenly feel as if the virtual body is your own...
I can't do any of these things, because I'm a stressed out medical student with a daunting number of exams in front of me, but I'm trying to live vicariously through you guys here, so please do me a solid and try this stuff out, for your own sake and mine.
TL;DR
TL;DR: With VR you trick your brain into thinking you're in another body, that you're outside of your body, or that you have an extra limb. Go try it out, right now. Explore the uses in the name of science.
EDIT: More youtube videos demonstrating the experiments.
http://www.youtube.com/watch?v=98JEwfc4pto
http://www.youtube.com/watch?v=GZDDWozq3b4