A matte painting commonly refers to a painted or drawn piece of scenery used in movies or animations. They belong more or less to the standard repertoire of special effects.
James McWilliams created an interesting short video which shows the progress of such a painting. In several steps he first paints the scenery of an “ancient bathhouse” (read: mysterious ruins including a water fall). Then the painting is projected onto simple 3d geometries and a short tracking shot through the scenery is animated.
The video is a nice insight into how such effects are created. The download size is kinda hefty, though: 65MB.
(via The Reaction)