Visual identify is extension of standard identify spell which benefits from advanced knowledge of basic principles of magic. Normally, caster would need to have the item to be identified in his hands, but for visual identify it is enough to just see it. Seeing is required to knowledge of its exact position, as caster needs to check flowing of magical energies and how these energies are modified by presence of the item. This spell is very useful to know what are the monsters using, because you cannot ask them to give it to you for a moment for identification...

See also: identify, remote identify