The author you're thinking of is Neal Stephenson, and the book is "Snow Crash" published in 1992. In the book, he coined the term "ractors" for actors who perform in front of motion-capture cameras to create lifelike animations. He also predicted the use of CGI and AI in filmmaking to create movies with long-dead actors.
I haven’t read it and the Wikipedia article doesn’t seem to mention virtual actors, so it could be wrong. At least it didn’t hallucinate a fake book.