In the old days, artists would paint on a life-sized canvas or even a sheet of glass to incorporate new elements in a shot. Many special effects were not done in post production, but rather in-camera. Today digital matte painting and compositing allow a more detailed and controlled environment for developing unique worlds. Wiki-Pedia on Matte Painting.
Matte Paintings are an essential part of film-making and allow the audience to travel to a mysterious planet, or go back in time to an early period of human life. You often see matte paintings in disaster movies where clever artists have brought destruction to a popular city or other famous landmark.
Once a digital painting has been completed, compositors can add life to these still paintings such as chimney smoke, moving water, atmospheres and even birds flying in the sky. More advanced mixtures of matte paintings utilize 3d animation such as cars driving or even space ships from the future!
Camera movement is also possible with a process called 3d camera mapping. By projecting your scene on to custom-built 3D geometry, you can later add a realistic camera move. View Example.
The world of matte painting is vast and I encourage you to do some research on your own into this amazing side of Hollywood. You may not personally be a matte painting artist but if you understand the process, it just might help you become a better compositor. Maybe.