VLM stands for
Virtual Light Machine.
It was a program in the CD-ROM unit for the Atari Jaguar. When you would play a music CD through the machine, the television screen would show one of a variety of effects consisting of melting shapes, twisting lines, and such. There were 81 different modes, and each one in some way would move to the music. Very Cool.
There exists a special VLM cheat to let you create your own effects.