Oculus claims that it has (somewhat) solved both problems with its Oculus Rift headset. First, Oculus uses a 110 degrees field of view and a lower latency head tracking, thanks to the progress made in motion sensors. Also, the larger field of view probably helps reducing the head motion as well. The cool thing with Oculus is that it has two screens (one for each eye), so it is inherently in stereo 3D.
The Oculus team’s work is so good that top developer John Carmack who created Doom and Quake says that it is “the best VR demo probably the world has ever seen” during the last E3. Oculus is a Kickstarter project and at the moment, their goal is to raise enough money to build development kits. From the developer feedback, they hope to refine and make a great consumer product.