The chroma key aka "green screen" processing is the latest development in the special effects imaging world.  The process is a relative to the original bluescreen technique developed in the 1930's by RKO Radio Pictures as a travelling matte.  This process allowed cinemaphotographers to layer images enabling actors to appear to be in places or scenes that truly did not exist.

 

Oz: The Great and Powerful is a beautiful example of how Chroma Key technology excels.  The film starts off in black and white and layers period styling to the film.  When James Franco's character crosses into the Land of Oz, the film explodes with color and creatures of wild varieties.  China Doll, who is one of my favorite characters, has the appearance of china.  None of this would have been possible without the green screen special effects.

The technology continues to grow.  I remember films like the original Star Wars trilogy and how we were all amazed at the special effects in 1977.  Then George Lucas reimages the films to add the ideas and visions had originally envisioned but he was unable to achieve because the technology just wasn't there yet. 

It will be very interesting to see how films will look in another 20 to 30 years.