Truly coming into their own as a source of simulations and indeed entertainment aboard Enterprise under the command of Picard, when the new holodeck's were fitted to the ship allowing an out of this world experience.
The idea is simple though the technology behind it is far from it. Holo emitters lay out a complete environment, a mini universe almost that can have interactive, touchable characters and landscapes. One of Picard's favourite programmes is based on a childhood hero, the fictional character Dixon Hill.
However Holodeck's do come with their problems. For instance a person can easily develop Holo addiction as an environment programmed yourself can be a far more fun and safe place than the real world. A leader in the Path Finder Project Reg Barclay has suffered from such a condition and at one point spent more time on the Holodeck with his virtual Voyager crew then he did in the real world.