For me, overlays or static portions of the viewing area greatly reduce simulation sickness. Adding an overlay won't work in all situations, but keep in mind that creating areas of the screen which ground the player's perception of the world, will help many users.
Figure 7.13 is a collection of examples which immerse the player in VR experiences while reducing simulation sickness. The images are, clockwise from the upper left:
- The cockpit environment in EVE: Valkyrie
- The helmet visor in Valiant
- Persistent interface elements in Time Rifters
- An example from researchers at Purdue University
Where they've seen a 13.5% reduction in simulation sickness by adding a fake nose to the experience: