This paper presents preliminary data from two clinical trials currently underway using flat screen virtual reality (VR) technology for physical rehabilitation. In the first study, we are comparing a VR-delivered exercise program to a conventional exercise program for the rehabilitation of shoulder joint range-of-motion in patients with chronic frozen shoulder. In the second study, we are comparing two exercise programs, VR and conventional, for balance retraining in subjects post-traumatic brain injury. Effective VR-based rehabilitation that is easily adapted for individuals to use both in inpatient, outpatient and home-based care could be used as a supplement or alternative to conventional therapy. If this new treatment approach is found to be effective, it could provide a way to encourage exercise and treatment compliance, provide safe and motivating therapy and could lead to the ability to provide exercises to clients in distant locations through telehealth applications of VR treatment. VR is a new technology and the possibilities for rehabilitation are only just beginning to be assessed.