I had a chance to play around with an Occulus Rift at a hackathon a few months ago. I played some sort of game whwre you have to sneak through a labratory without being detected by these monsters or aliens or something, I cant quite remember. It was pretty cool to be "immersed" in the game, and the control was surprisingly fluid.
That said, I prefer the game being on TV though. I like to be able to easily look up from the game and see what's going on around me.
Despite it's limitations, the Nintendo Virtual Boy was an amazing system.