More than 10 years ago, Tart (1990) described virtual reality (VR) as a technological model of consciousness offering intriguing possibilities for developing diagnostic, inductive, psychotherapeutic, and training techniques that can extend and supplement current ones. To exploit and understand this potential is the overall goal of the "Telemedicine and Portable Virtual Environment in Clinical Psychology"--VEPSY UPDATED--a European Community-funded research project (IST-2000-25323, www.cybertherapy.info). Particularly, its specific goal is the development of different PC-based virtual reality modules to be used in clinical assessment and treatment of social phobia, panic disorders, male sexual disorders, obesity, and eating disorders. The paper describes the clinical and technical rationale behind the clinical applications developed by the project. Moreover, the paper focuses its analysis on the possible role of VR in clinical psychology and how it can be used for therapeutic change.