Far from being in conflict, it turns out that "pretty" and "usable" are the siamese twins of good usability. Research continues to prove that attractive things are, literally, easier to use. How is that possible? Well, it all comes down to emotion and the brain...
Designers (and users) have intuitively known for centuries that if it's "gorgeous", "inviting", or "fun", it just seems to work better. Certainly we're more forgiving of an object that's made friends with us first by being cute or interesting to look at. But research showing that users are more effective at completing tasks with objects when they're simply made more attractive goes a step further.
Don Norman (of the famed Nielsen/Norman group) is a self-proclaimed convert from the old-school "stale-but-usable" dogma - to a new approach that doesn't attempt to strip usability down to the nads. He is part of a growing trend in science that seeks to rationally consider the tight embrace between emotion and cognition that results in how we think and do.
He suggests these research findings on usability can be scientifically explained by affect: when we're happy and relaxed, we are more creative, and more able to think outside of the box, whereas when we're anxious, we narrow our focus, and at worst, become blinded to solutions. He speaks of objects, but clearly this applies to interfaces and virtual environments.
It goes without saying that pretty things are often still miserably unusable -- there's a lot more to these, and other findings, then this humble nutshell can hold, so check out Don Norman's book Emotional Design: Why We Love (or Hate) Everyday Things and be intrigued.