Matte Effects

Matte effects in today's films are better know as blue or green screening.  However, even before the start of blue and green screening, there have been many ways to create a setting that isn't truly there.  This used to be done by having a projector show an image behind the actors to create a whole new set or landscape.  A good example of this is in Edwin Porter's The Great Train Robbery from 1903.  The background was a projection to show what the inside of a train station at the time would look like, and the audiences loved it.

Over the years, as technology has improved, the matte effect has also improved greatly.  Many films today use the blue or green screen effect.  Films that use this range from science fiction to fantasy to action to horror.  The use of the green screen is to digitally put the image into the film during the post-production, unlike the older films where they created the scene during production.
There are many filmmakers who, over time, you can see a difference in how they create their effects.  One of them being Tim Burton.  Looking at much of his earlier work, specifically Beetle Juice from 1988, where all of the special effects were done on set compared to his more recent films, such as Alice in Wonderland from 2010, where the majority of the film was done in front of a green screen with many of the characters also wearing green costumes in order to digitally change their appearance later.  In Beetle Juice the arms in the picture below were fabricated and were used on set as seen in the movie compared to Alice in Wonderland where you can see practically everything is green screened except for the actual characters.