Emotion is a key component for sound design in movies and videogames. We believe that it is also a key component in virtual environments and simulation. The following paper summarizes work at the MOVES Institute's Immersive Audio Laboratory which demonstrates the emotional impact of sound in interactive media and also shows that emotionality evoked in a simulation has a positive impact on learning for events that occur in the simulation. Our research methods employ objective measures such as physiological recordings and memory recall testing rather than the more commonly used subjective questionnaires and surveys. It is our belief that these objective measures are more easily replicated and generalized to a wide variety of simulations and situations. We discuss our research in terms of the parallel development in the MOVES Institute of the videogame "America's Army: Operations," which we use as an experimental test bed and tool. Applications of this research are discussed in terms of high-end simulation projects like the Virtual Technologies and Environments (VIRTE) program sponsored by the Office of Naval Research.