A handheld device in an audio and video system including a system for receiving and processing video and/or audio signals, a system for displaying a virtual image to a user, and a system for producing sounds audible to a user. The handheld device also incorporates a shroud to block ambient light when the handheld unit is engaged with the user's face. As a result, the user may hear sounds produced from the received audio signals. Further the user may see the virtual images produced from the received video signals when the handheld device is engaged with the users face.