What I hadn't realized is how good the technology has gotten. I'm not sure if the following clip is an extension of the idea I'd read about or someone else taking it the next step, but in it you see the virtual character Miku Hatsune 'live' in concert. That is, the musicians are all real and playing live, the audience is real, and the stage is real. What's 'virtual' is the image of the girl singer, essentially a hologram projected onto the stage. So what you're seeing in this clip hasn't been added in after the fact; she's performing in real time.
Obviously, this has all sorts of applications and consequences, but for now it's fun to just marvel in their having pulled this off.