This video, a demonstration piece highlighting the capabilities of Stargate Studios shows how visual effects designers use green screens to combine ordinary studio and backlot film footage with extraordinary special effects shots.
Many of the shots we see on film, even of seeminingly ordinary events, consist of two or more layers of imagery layered together.
A green screen allows special effects artists and computer programs to easily remove the background from a layer of film and then superimpose it on another, a process called chroma key compositing.
The same principal was used to create some of the images on this website.
Read more about chroma key compositing in the Wikipedia.