To efficiently process sensory information, the brain relies on statistical regularities in the input. While generally improving the reliability of sensory estimates, this strategy also induces perceptual illusions that help reveal the underlying computational principles. Focusing on auditory and visual perception, in my talk I will describe how the brain exploits statistical regularities within and across the senses for the perception space, time and multisensory integration. In particular, I will show how results from a series of psychophysical experiments can be interpreted in the light of Bayesian Decision Theory, and I will demonstrate how such canonical computations can be implemented into simple and biologically plausible neural circuits. Finally, I will show how such principles of sensory information processing can be leveraged in virtual and augmented reality to overcome display limitations and expand human perception.