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Very serious website Serious Games Source has a feature on VR being used as therapy for those suffering from Post-Traumatic Stress Disorder:
In ongoing research projects the Veterans Administration, the US Army, and the Office of Naval Research are using VR Exposure therapy to treat soldiers afflicted with PTSD. We are developing a number of Middle East conflict simulations that include such common elements as sniper attacks, improvised explosive devices (IEDs), and rocket propelled grenade (RPG) attacks. These applications include functionality that allows therapists to dynamically control the intensity of the experience for the patient, increasing or decreasing the level of stimulation and tension according to the level of anxiety.
This goes along with the traditional treatment for PTSD, which has the patient re-imagining the event while in a safe environment with a mental health professional, and then reworking it over and over until it's been processed. This is a simplistic and hamhanded explanation, but you get the idea.
The problem is that those suffering from traumatic memories will generally do anything to avoid them, making the therapy difficult. Having a simulation do the "imagining" for the patient seems to shortcut this issue.
The article is long and complicated (and very serious) and full of graphs, but a good read anyway.
Playing Games with Painful Memories:
Designing VR Exposure Therapy Simulations for PTSD [Serious Games Source]
