This paper describes our studies on perception of virtual object locations. We explore the behavior of various factors related to depth perception, especially the interplay of fuzziness and binocular disparity. Experiments measure this interplay with the use of a three-dimensional display. Image fuzziness is ordinarily seen as an effect of the aerial perspective in two-dimensional displays for distant objects. We found that it can also be a source of depth representation also in three-dimensional display space. We also investigated an effect of fuzziness on a manipulation task in a virtual environment. This paper presents results of a series of experiments.