I would be inclined to say that the major advance has been price, and not a great deal more.
Back in the early days, VR was insanely expensive. By default you needed an SGI Reality engine per screen, and not even a low end one. You could sink a million dollars into the graphics engine and only get to mid range performance for a Cave. Nowadays it is hard to buy a PC with graphics that slow. There are no million dollar graphics engines anymore, the performance has leveled off in that sense. The other thing that has got cheaper are projectors, you no longer need go out and spend huge amounts of money with the likes of Barco or Christie to get HD levels of resolution. You can, and the high end can use 4k resolution, which are insane prices. High end glasses used to be beyond belief, with some running into little change out of $10,000. Now affordable. Shutter glasses used mean CrystalEyes glasses at silly prices (change out of $1,000), and they broke all the time. Now affordable, and almost disposable.
The cost of motion trackers is not a lot reduced, Ascension’s Flock of Birds is still much the same as it ever was. What is starting to look interesting are things like Knect, and other camera based systems. But latency and accuracy remain important to get a good result. You need to know the location of both eyes, and include rotation, since the user may put their head on its side.
But the fundamental limits to immersive VR remain, and show no signs of going away.
The big one is that the depth illusion is only created by stereopsis. There is no depth of field. The image remains solidly in focus on at the distance to the screen, not at the distance that the stereo image presents it. This usually leads to a blinding headache after about an hour. Indeed it remains one of the limiting issues in 3D cinema.
A big problem with VR glasses is that motion in the virtual world does not track motion of the wearer, which leads to motion sickness, and significant disorientation. We used to joke that glasses required two users, one to wear them, the other to catch them as they fell. So you fall over, get sick, and get a headache. It hasn’t improved.
So the only thing that has really advanced the state of the art is Moore’s Law, which basically has reduced the price of entry, but not otherwise improved the experience. Software can use the increased performance to provide higher detail within the virtual world, in much the way we see that in any other graphics system, but the basics of the VR experience are otherwise mostly unchanged.