hen the man behind the highest-grossing film of all time announced plans to make a $200 million sci-fi epic entirely in 3D, eyebrows raised across the industry. Family animations in 3D are one thing, but that kind of outlay on a film with narrow genre appeal and so few 3D-capable cinemas? It would be a titanic gamble for any studio to take.

But James Cameron isn't merely a director. He knows 3D far better than most, and if he says its time has come, important people take notice.

"Watching a stereo movie is looking into an alternate reality through a window," Cameron told Variety, before cranking the hype a notch further. "I believe that a functional MRI study of brain activity would show that more neurons are actively engaged in processing a 3D movie than the same film seen in 2D."

Such bluster comes easily to 3D's chief evangelist, and if he has his way - which looks likely, given the raft of demos at this year's Consumer Electronics Show (CES) - 2009 will be the year 3D comes of age as an entertainment medium.

The signs are plain to see. Nvidia is working with games developers to build 3D directly into their latest releases, and with monitor manufacturers to bring it to your desktop. Cinema chains are rolling out 3D projectors across their theatres, while TV manufacturers progress from HD to 3D-ready sets.

And then there's Sky, buoyed by its booming high-definition service, announcing audacious plans to beam 3D to your living room via your existing set-top box.

Put simply, all parties agree that today's 3D technology works. The glasses are more Matrix-chic than the red-and-blue specs of the 1980s, and the issues that plagued 3D in the past have been all but eliminated. So, just as HD has become the must-have upgrade, the industry is betting big on 3D being next.

The 3D desktop

So what's changed? Most people remember those red-and-blue anaglyph glasses and, while they couldn't be further from the current state of 3D, the core concept still applies.

To achieve any stereoscopic effect, each eye must be shown a slightly different perspective of an image to simulate the way we see things in the real world. If done with suitable accuracy the visual cortex of the brain is tricked into fusing the two images into one, resulting in the perception of depth. Anaglyphs achieved this with colour filters, but in recent times two more advanced approaches have been developed.

Polarisation is the simpler method: the left and right images are interlaced and displayed together on a special LCD, with a filter over the screen to polarise alternate lines at opposing angles. Corresponding lens filters on a set of cheap polarised glasses allow each eye to see only half of the image.

The more advanced and expensive method uses active-shutter technology: this doesn't require a special filter on the LCD, but instead uses battery-powered glasses with liquid crystal shutters on each lens.

As the two images are rapidly alternated tens of times per second, a transceiver synchronises the shutters in the lenses to open and close in time with the left and right images on-screen, so each eye sees only its intended image for half the frames in each second.

Until now, polarisation has been the main type of 3D available to gamers, thanks to Zalman's Trimon monitors. We tested them in 2007 and were impressed by the lack of eyestrain and the depth in the games that were supported.

But that support was the key stumbling block: the list of compatible games was short and lacked any recent blockbusters, while the adapted Nvidia driver was based on 18-month-old code and only worked with last-generation graphics cards.

Being a low-key components manufacturer rather than a major graphics player, Zalman found it tough to persuade games developers and Nvidia to play ball.

What 3D really needed was a major name with the clout to prompt both the gaming world and the monitor market into action, and at CES this year it got it. Nvidia announced its GeForce 3D Vision project, which takes advantage of its relationship with the world's biggest games developers to overcome a major issue that's held back 3D.

Put simply, the biggest factor in determining the overall effectiveness of 3D is the starting point. Converting a flat 2D image to 3D will never be truly accurate and effective because, without information about the positions of the objects in the scene, all depth must necessarily be estimated.

In contrast, GeForce 3D Vision is centred on the inherent advantage today's games hold over existing films: they're generated on-the-fly, which means with a few tweaks it's possible for the Nvidia graphics card in your PC to convert the game engine into ready-made 3D before it renders the image.

So, by reading the z-buffer (depth) information in the code, 3D Vision knows precisely where objects should be in the scene and can dynamically alter their position to produce two images that accurately represent the perspective of each eye. The difference this makes to the 3D effect is enormous, and must be seen to be truly appreciated.

Nvidia has opted for active-shutter technology, which is a gamble. Unlike the interlaced image of a polarised screen, this produces a full-resolution image for each eye, so it pushes the graphics card harder than usual. Nvidia claims the frame rate should drop only between a quarter and a third, but you'll still need a decent PC to run it smoothly.

And then there's the primary reason Nvidia has waited until now to enter the arena. Today's desktop LCDs refresh at 60Hz, which is fast enough to avoid flickering and eyestrain, but as active-shutter technology works by alternating two images the effective refresh rate is halved to 30Hz. To achieve the same 60Hz smoothness a 120Hz display is therefore required, which is why Nvidia has partnered with manufacturers to bring the next generation of LCDs to the market.

Samsung's SyncMaster 2233RZ and ViewSonic's FuHzion VX2265wm are available in the US and the UK. These 120Hz desktop LCDs will be available in a bundle with Nvidia's GeForce 3D Vision kit. Initial prices will be high: Nvidia is talking $300 or more for its glasses and transceiver kit, and Samsung's 22in monitor will cost over $600. That may seem like a major barrier, but Nvidia is taking the long-term view.

"This is initially about getting the product out there for early adopters," said Ben Berraondo, Nvidia PR manager. "But with products like GeForce 3D Vision to drive demand, we can see all mid to high-end LCDs being 120Hz as early as 2010."

The biggest problem will be getting people to see for themselves how good current 3D looks, and in this task Nvidia may rely on another major player already taking those steps: Hollywood.

The big-screen pioneer

There's no doubt it's the big screen that's been driving 3D technology forward in recent years. IMAX cinemas give many the opportunity to see true 3D cinema for the first time, with short films chronicling the natural world and the environment making up much of the available content.

But as 3D screens have multiplied, Hollywood has upped its output. Late 2007 saw the release of Robert Zemeckis' $150 million film, Beowulf. Created entirely using motion capture and specifically marketed as a 3D experience, it more than made back its production costs, and 3D showings accrued 13% of the film's opening weekend takings in the US - despite making up less than 2% of the total screens.

3D porn in homes?

The porn industry has been credited with driving the development of DVD and internet video: will it help drive 3D video into homes too? Studios have been tripping over themselves to claim the first true 3D adult production. Stephen Shiu Jr, chairman of Hong Kong filmmaker One Dollar Production, is spending $4 million on a 3D remake of "erotic comedy" Sex and Zen. "Just imagine that you'll be watching it as if you were sitting beside the bed," he told Hong Kong's Sunday Morning Post. "There will be many close-ups."

The clamour for headlines isn't surprising, as the internet has hit the porn-film industry particularly hard. 3D technology is seen - initially, at least - as a way to beat piracy at a time when so much paid-for content is finding its way online. The industry needs to offer viewers something they can't get for free.

The opportunity certainly exists. Once early 3D TV adopters have watched their Pixar movies, they're going to need content to encourage them to keep those glasses on. Given the internet's chokehold on porn today, products such as GeForce 3D Vision could prove more useful than its makers envisaged: Nvidia has created a software video player to play back 3D content via its glasses, so resourceful studios could convert their back catalogues to 3D and see if consumers will start paying afresh.

Successful or not, 3D is already causing nervousness in the industry. "We're having trouble finding a male lead who is willing to undress in front of the camera," lamented Shiu. "It's a lot more difficult to find an actor than an actress for this kind of film."