Hold a pencil upright in front of your face. Close one eye, look at the pencil, then open that eye, and close the other. Did you notice that your view of the pencil shifted slightly when you looked through one then the other eye? You actually have two images of the pencil, one from each eye, but when you look at the pencil with your two eyes, you see only a single view. This way of seeing is a skill most of us develop in the first months of life. You unconsciously aim both eyes at the pencil so that its image falls on the same central part of both retinas, the light-sensing region in the back of both eyes. Your brain then interprets these two images of the pencil as coming from the same object located in one unique place in space.
If you were to hold the pencil in front of your friend's face and move it near and far, you would notice that he would turn in his eyes to see the pencil when it was close and turn out his eyes when it was further away. With these eye movements, your friend is able to keep the image of the pencil on the same central part of both retinas.
What happens however if a different image falls on the central parts of the two retinas? Would you see two different objects in the same spatial location? This doesn't usually happen in real life, but we can create this situation with the help of a single 8 ½ by 11 piece of paper. Take the paper and roll it into a tube. Close one eye and then look at a distant object through the tube. Place your free hand in an upright position next to the tube with your palm facing toward you. Now open the closed eye and keep looking in the distance. (See parts A and C in the figure below.)
Did you get the weird impression that there is a hole going right through your hand? (See Part B in the Figure.) Since one eye registered the hole in the tube on the same part of the retina as the other eye registered the hand, your brain interpreted the two images as coming from the same place in space, and you saw the tube as running through your hand!
Not everyone uses their two eyes in the same way. About 4 % of the population has strabismus or misaligned eyes. The do not aim their two eyes simultaneously at the same place in space. So their brain adapts to this unusual way of seeing by no longer interpreting images that are cast on the same part of the two retinas as coming from the same spatial location. This is true for one of my cross-eyed friends. When he does the hole-in-the-hand experiment, he sees a hand to one side and the tube to the other. Since he does not combine the information from the two eyes in the normal way, he does not have 3D vision. Yet, when it comes to the hole-in-the-hand illusion, he actually has a more accurate view of the world!