Figure 1 shows a slightly exploded view from inside a skybox. Skyboxes are also known as environment maps. The player stands in the middle of the box, so no matter which way they turn they see some part of the box. The game engine figures out which parts of the skybox are visible and displays the proper pixels as the player moves. Only objects that the player can never reach will look correct, like clouds in the sky or distant mountains.
Skyboxes look great, if they are created properly.
They create the illusion the player is in a large, seamless world. But the illusion is quickly shattered if the borders between the skybox images don't match exactly, or if you create images with the wrong perspective. This article will give you a good understanding of skyboxes and related technologies, and will help you avoid time-wasting mistakes by describing several techniques for creating skyboxes.