Virtual reality , or VR, (TV: Extremis) was an computer-simulated artificial system. While "virtual reality" was generally used to refer to computer realities, the word "virtual" usually meant something was not-real.
When she arrived in Cathedral, Bernice Summerfield asked the Grey Man if it was a "virtual-thingy, a parallel thingy, or a computer thingy?" (PROSE: Falls the Shadow) She reiterated later that she hated virtual realities when she realised she was in a dream with the Eternal Pain. (PROSE: Set Piece)
In 2050 it was a system of white numbers used for communications, games and imprisonment. Starkey was kept prisoner in a virtual reality detention facility, while Jorjie hacked into the reality using her VR goggles. (TV: Regeneration)
In the time of the Earth Empire in the 26th century, citizens of the Empire (and others including the Hoothi, Rutans, and Daleks) used puterspace, a form of virtual reality created by all businesses and computers on and in orbit around Heaven. Different puterspaces may have existed based on different planets. (PROSE: Love and War)
By the 52nd century, the Hypernet connected the entire Human Empire and people could upload their minds to the net using neural interface helmets, which Ace compared to The Matrix. Virtually, they existed as avatars; if they were killed on the Hypernet their real bodies would die. (AUDIO: Revenge of the Swarm)