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: At least sometimes...
Oh yeah, I've written about that too.
Basically any experience where the world moves without you moving causes nausea, which is why Valve is pushing for room scale VR where you can walk around in a room. Other things that works fine is cockpit games like driving and space simulations. The first person genre which we know and love will be harder to translate to VR, at least in the format we are used to.
Causes for nausea or eye-strain are among others: dropped frames, latency, bad IPD configuration, translation or rotation uncoupled from reality, effects that differs between your eyes. So yeah, developers and users alike will have to tread carefully :P
Considering how immersive the medium is, it'll be quite different from normal video games, VR has been used by the military to treat PTSD, question is if we will get people that got their PTSD from a VR horror/shooter game in the near future. The media will have a field day with this, just as they blame whatever crime on video games today, but probably more :x
Oh, I'm using the Halo forum to discuss VR, sorry! Oh wait, I posted a video about VR too, uh... erhm.