Augmented Reality is nothing new, but till now it was mostly a nerdy webcam demo thing. But when you use a mobile phone like the iPhone, where you can move the camera and the display in one device, the user experience could really become enjoyable. Just think of all the possible applications with this technology. ARToolworks developed a version of the free ARToolKit (a software library for building Augmented Reality applications) for the iPhone. In this video they show us a preview, unfortunatly they only managed to get 10 frames per second. But maybe with some help from Apple they could boost the speed over 20 fps.
Warning, mute the sound of the video right away! Believe me!