Real objects emit light and can create real images that light passes through, while virtual objects are formed by light that does not actually pass through them. The distinction lies in whether real rays of light interact with the object or image. For example, in a Galilean telescope, the objective lens has a real object, while the eyepiece has a virtual object. Virtual objects can be created by an optical instrument and then used by another instrument, as seen with mirrors where the image from one mirror serves as a virtual object for another. Understanding these concepts is crucial for predicting optical system performance rather than just memorizing definitions.