Virtual reality-based rehabilitation systems involving first-person object manipulation need to include representations of the patient’s hands and arms in the virtual environment. The virtual arms and hands should appear in the correct first-person spatial positions to allow natural interaction with the system. Head-mounted displays have cost and motion sickness problems even with healthy subjects, while other methods such as table-top projections have problems with image occlusion by the user’s own limbs. Here we present the first large-scale, age-matched study of a mirrored horizontal display which shows virtual arms in the correct position relative to the user on a table top. We compared it with a conventional display in a questionnaire and a simple arm motor task on 21 sub-acute stroke patients, 14 age-matched healthy subjects and 26 younger healthy subjects. Healthy subjects reported higher ownership of virtual arms using our display and enjoyed it more, while stroke patients preferred the normal display due to comfort reasons but showed no preference in terms of enjoyment. Patients and healthy subjects performed the motor task equally well in the display in either the mirrored or normal positions. We conclude that our display may achieve good acceptance with stroke patients after customization to accommodate patient-specific sitting postures. With these improvements it may become a valuable tool for virtual reality-based arm rehabilitation.