The thing is that we could have a First Gen version of full dive in the next few years if not today. The technology is already there, it just needs to be brought together.
First product is a BCI (Brain Controller Interface). An example of such a device is a product called an Emotiv+ (although there are various products/brands already out). I bought one but unfortunately I lack the know-how to do much of anything with it. The Emotiv monitors the frontal lobe and the program that came with it allows you to move a 3D ball in a room with just your mind. And yes, although difficult and requires practice, it works. The degrees of movement are: Forward, Backward, Up, Down, Left, Right, Rotate Left, Rotate Right, Turn Left, and Turn Right. The reason it requires practice is because it requires you to have focus over your state of mind since it monitors the frontal. Now imagine if this was set up to focus its monitoring to the pre-motor and motor cortex. You could have an avatar mimicking the movement of a real person and no need to practice since we already know how to move our body the way we want.
We could have that now. Today.
So that takes care of the output of controlling the avatar, what about other inputs/outputs?
To go beyond a helmet of a head device, you can utilize a body suit for textile feedback. This is called a Haptic feedback suit and they already exist.
So all of the above alone could create a very immersive VR experience. All of the above is technology that exists right now. Now for the tech that is not quite there but very close (next few years).
The only tech missing above is to prevent the body from receiving the signals to move so only the avatar moves. I too, believe the technology is very nearly there.
While I don't believe that this technology is far enough along to write information to the brain directly, I think it could be used to send an interference signal to where the brain meets the spine to neutralize signals to the body. A kind of sleep paralysis but while awake.
A hurtle that comes to mind, other than the psychological one of being temporarily paralyzed, is our sixth sense. No I don't mean the fake, supernatural, sense often called our sixth sense, I mean our actual sixth sense. A sense called Proprioception. Our ability to know what position our body is in. However, proprioception can be tricked. Even if it's not tricked, I think it can simply be overcome by will power.
Another hurtle that comes to mind is motion sickness. You are getting visual feedback of moving around but your real body isn't moving and the inner ear will sense this. This could cause motion sickness to occur in some people.
So there you have it. With that interference research developed the right way (a few years), we could be putting on a helmet, a body suit, lying down on a bed, and experiencing virtual environments like never before.
Only senses not covered are smell and taste. Not really necessary for a First Gen. If that brain stimulation research, and our understanding of the brain, advances, maybe we could move onto stimulating smell and taste, maybe even textile feedback. I think anything auditory and visual would be too complex to stimulate and will require external hardware.
I wanted to make a separate reply to expand on the tricking of proprioception as this is something that can be done easily at home with the help of another.
Lay flat on your stomach with your arms extended out "above" you.
Close your eyes and keep them closed.
Have the other person pick up your hands far enough to cause your back to arch. They should be trying to get your stomach off the floor.
Don't try to resist, simply let your body hang limp.
Hold for 1 min.
Have them slowly lower your arms back down.
If done right, it should feel like your arms are sinking into the ground. You just tricked your proprioception as your body thinks your arms are lower down than they actually are. The reason for keeping your eyes closed is because visual feedback can override this sensation which is why I think it can be tricked in a VR scenario. Oh and don't worry, the effect is temporary. If you continue to lay there with your eyes closed, you will feel your proprioception realigning. Eventually your arms will feel like they are exactly where they really are.