Microsoft Hololens

Microsoft's HoloLens prototype has all the innards of a computer built directly into the headset. That means no cords or even a smartphone required.

Microsoft's HoloLens, which the company unveiled at its Redmond, Wash., headquarters on Wednesday, is a sleek, flashy headset with transparent lenses. You can see the world around you, but suddenly that world is transformed -- with 3D objects floating in midair, virtual screens on the wall and your living room covered in virtual characters running amok.

Technology companies have long promised to bring us the future now, reaching ahead 5 or 10 years to try to amaze consumers with the next big breakthrough. Hollywood, on the other hand, has shown that tech in action (or at least simulations of it).

What's a HoloLens, and how does it work?

Microsoft's HoloLens is not actually producing 3D images that everyone can see; this isn't "Star Trek."

Instead of everyone walking into a room made to reproduce 3D images, Microsoft's goggles show images only the wearer can see. Everyone else will just think you're wearing goofy-looking glasses.

Another key thing about HoloLens is what Microsoft is trying to accomplish.

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Microsoft envisions the HoloLens as both a personal and a workplace device.

The company is not trying to transport you to a different world, but rather bring the wonders of a computer directly to the one you're living in. Microsoft is overlaying images and objects onto our living rooms.

As a HoloLens wearer, you'll still see the real world in front of you. You can walk around and talk to others without worrying about bumping into walls.

The goggles will track your movements, watch your gaze and transform what you see by blasting light at your eyes (it doesn't hurt). Because the device tracks where you are, you can use hand gestures -- right now it's only a midair click by raising and lowering your finger -- to interact with the 3D images.

There's a whole bunch of other hardware that's designed to help the HoloLens' effects feel believable. The device has a plethora of sensors to sense your movements in a room and it uses this information along with layers of colored glass to create images you can interact with or investigate from different angles. Want to see the back of a virtual bike in the middle of your kitchen? Just walk to the other side of it.

The goggles also have a camera that looks at the room, so the HoloLens knows where tables, chairs and other objects are. It then uses that information to project 3D images on top of and even inside them -- place virtual dynamite on your desk and you might blow a hole to see what's inside.

With Skype video chatting, HoloLens users can let others see through their eyes to help with tasks and even doodle right on top of your line of vision.