I anticipate that both virtual reality (VR / AR) and bio-robotics (MEMS/new materials) will eventually reach the same level of sophistication. What this means is that it will one day be almost impossible to distinguish virtual reality from reality—even with all the physics breaking of Inception-like environments.
Physics-breaking can be faked with programmable matter (like a magic trick). A holodeck is likely not necissary for immersive VR but you could have a holodeck-like container to create a VR-like experience in the real world (I guess that’s what a holodeck actually is but I still think there could be a distinction here).
Nanotechnology is based on the concept of tiny, self-replicating robots. The Utility Fog is a very simple extension of the idea: Suppose, instead of building the object you want atom by atom, the tiny robots linked their arms together to form a solid mass in the shape of the object you wanted? Then, when you got tired of that avant-garde coffeetable, the robots could simply shift around a little and you’d have an elegant Queen Anne piece instead.
The color and reflectivity of an object are results of its properties as an antenna in the micron wavelength region. Each robot could have an “antenna arm” that it could manipulate to vary those properties, and thus the surface of a Utility Fog object could look just about however you wanted it to. A “thin film” of robots could act as a video screen, varying their optical properties in real time.
The concept of objects (or creatures) formed of “intelligent” polymorphic substances goes back at least to the 1930′s. A stock character in the science fiction stories of the day was the amoeboid alien able to assume any shape, and to extrude specialized appendages at will. More recently the motion picture “Terminator 2″ has popularized this notion of intelligent material.
Nanotechnology will make intelligent material possible; but as usual, the truth will be stranger than the fiction. Not only can we build objects of intelligent material: we can embed them, along with “real” or pre-existing objects, in intelligent space!
Intelligent material need not be polymorphic, and polymorphic material need not be intelligent. If you melt a piece of metal into a mold, it assumes a new shape. If you had an object that could perform the same transformation on command, it would be intelligent as well as polymorphic. There will exist technologies reflecting the entire spectrum between these extremes, starting with today’s “memory plastics”.
There will in all likelihood not only be specialized Fog-making machines, and Fog-making-machine making machines, but Fog-making-machine-making-machine making machines. The more specialized a production process is, the more efficient. The general-purpose assembler is a necessary bootstrap, but as nanotechnology matures it will engender longer and more complicated self-referential loops. The typical specialized nano-factory will be a breadbox to refrigerator-sized object, with literally trillions of parallel assembly lines converging in a tree-like structure to produce ever-larger sub-components of the end product.