Named after its inventor, Eugen Schüfftan, the Schüfftan process is a special effect that allows live action to be combined with a model or transparency “in camera”.
The process involves placing a mirror at an angle in front of the camera, so that it reflects the model/transparency. A section of the reflective surface of the mirror is then removed so that the studio set behind the mirror can be seen through the clear glass. By carefully lighting the studio set so that it matches the model/transparency, the final image captured by the camera is a seamless blend of the two.
Although effective and used to great affect in films such as “Metropolis”, the process was replaced by matte techniques which offer greater flexibility, including allowing the camera to pan. (source: hitchcockwiki)
Eugen Schüfftan (1893–1977) was an expressionist painter before he started working on the film industry as a camera man and special effects innovator.
The most popular recent use of the Schüfftan process that I know of occurs in The Lord of The Rings film trilogy. It wouldn’t be presumptuous to assume that production costs were not a limit or worry for Peter Jackson and his crew after the box-office success of the first installment. Considering the best of CGI technology that Peter Jackson probably had at his disposal, it has to be considered that his use of the Schüfftan process may have been a nod to old techniques if not a display of personal preference. (source: brooklynvisualeffects)