AR vs. MR, vs. VR

AR is augmented reality. If virtual reality is total immersion, augmented reality is all about layering virtual elements onto the real world. Pokémon Go is probably the most well-known example of this technique, with a nexus of magical animals layered onto a real-world map and what you can see with your phone’s camera.
Until recently, AR has been distinguished by a level of disconnect between the virtual and real world. You may have information imposed on your field of vision – like images or text, but these virtual elements are not anchored to the real world, and do not respond to physical objects in real-time.
Devices such as Google Glass were early attempts to integrate AR into headwear, but while there are reports that Apple is working on hardware dedicated to AR, and there are some crazy patents about AR contact lenses, the current mode for AR is to layer virtual elements using pre-existing devices such as smartphones and tablets.
MR is mixed reality. Mixed reality involves a strong element of interaction between physical and digital elements. The clearest case of this is Microsoft’s HoloLens, which can impose virtual models of buildings, bodies, and vehicles that designers can walk around, inspect and tweak as they see fit. Experimental hardware such as the Magic Leap and Intel’s Project Alloy prototype have given a glimpse of where this path could lead, potentially encompassing elements like haptics (touch).
The lines between AR and MR have blurred somewhat. You could argue the IKEA app, for example is a form of mixed reality as it allows users to walk around virtual furniture on a real-world carpet, as it if were a physical object. Some say MR is another way of saying ‘“true AR”. It is likely that, as digital-physical interactions become more sophisticated, one term will likely take over the other. Many believe mixed reality will prevail.
VR is virtual reality. It is most often used as an umbrella term for many immersive, computer-simulated environments. This means that you can probably get away with calling AR and MR subsections of VR.
Virtual reality is a totally computer-simulated version of reality (for sound and vision). Head-mounted displays like the Oculus Rift, HTC Vive, and PlayStation VR, as well as mobile-based headsets like Google Daydream and Samsung Gear, are all VR hardware. You strap them onto your face, and are immersed in a digital environment. Another subsection of VR is 360-degree video. Special cameras capture these images, so they are not computer-made virtual environments, but you still experience them using a VR headset.
Ideally, a VR user should feel like they have been transported from their living room into a totally different space. Having your field of vision taken up by a virtual world can trick your brain into feeling physically present within that reality. These ideas about presence and immersion and the potential for VR to communicate another person’s perspective, making a user feel physically involved in a way screen-based film cannot.

None of these should be confused with AI, artificial intelligence, which is a totally different topic.