Of course, it's not like they're using the chroma key feature on a video switcher. They're shooting in high def and/or using high resolution film, and then applying some pretty awesome software compositing tools to the problem. These days, the tools are getting quite advanced, being able to do things like resolve fine filigree objects, hair blowing in the wind, or even the transparency of smoke or water. They can anti-alias and get graduated transitions that look entirely convincing. Ever play with a Photoshop plug-in called Corel Knock Out? It's like the movie equivalent of that.

Something in particular I noticed about that demo reel, something that really helped sell the shots, was that many of the shots were outdoor shots. In other words, with only a few exceptions, if the scene was an outdoor scene, then it was actually shot outdoors with proper outdoor lighting.

I think that, as jaded viewers, we've come to recognize a chroma key shot any time we see an outdoor scene where the foreground actors are obviously being lit by indoor lighting. By making sure the outdoor shots are actually filmed outdoors, it takes away the single biggest problem that made our eyes recognize it as an effects shot.

There's other lighting tricks they can use to help the chroma key software. A big one is to hit the actors with a faint key light from behind (ie, the light shines from the approximate location of the green screen itself), and have the key light's color be exactly 180 degrees opposite the color of the green screen (ie, orange or red). This helps reduce the "green bounce" on the actors and makes the keying process more accurate.