while I wasn't looking, the whole concept of augmented reality suddenly got real. Not too long ago, having useful data superimposed on your view was something requiring bulky hardware to deliver dubious results. Ultranerds stumbled around MIT campus with headsets and battery packs. 
Then GPS got cheap and small, and wireless bandwidth opened up. Google made huge geographical datasets freely available. Then the chocolate inevitably ended up in the peanut butter when smart phones with GPS and compasses arrived. So now your phone knows where it is and which way it's facing, and it can look up the locations of things in that view. It doesn't recognize the Statue of Liberty but it knows it should be right ... there!
So far it looks like only the iPhone 3GS and Google's Android phones will be able to get the chocolate in the peanut butter. However any device with GPS, a magnetometer and web access could do it, theoretically.
Acrossair's application finds the subway stations around you and the distances to them. Hold the phone up and you will see the stations overlaid on the image. They say this is coming as soon as Apple approves it:http://www.acrossair.com/apps_newyorknearestsubway.htm
So far it looks like only the iPhone 3GS and Google's Android phones will be able to get the chocolate in the peanut butter. However any device with GPS, a magnetometer and web access could do it, theoretically.
Acrossair's application finds the subway stations around you and the distances to them. Hold the phone up and you will see the stations overlaid on the image. They say this is coming as soon as Apple approves it:http://www.acrossair.com/apps_newyorknearestsubway.htm
Layar is an augmented reality application for Android (Google' mobile OS) phones. Here's a demo showing real estate data overlaid on the camera image. http://layar.com/
A Swedish firm with the awesome name The Astonishing Tribe (TAT) wants to take it further. This is using face recognition to put data around peoples' faces: http://www.tat.se/site/showroom/latest_design.html
TAT would pull a bit of second life (remember that?) into first life by adding face recognition. They're calling this a "Concept", so don't expect to see it too soon, but it sounds doable: an iPhone can broadcast its location and ID so your friends can locate you. Set up a separate public profile that anyone can see. Then the chocolate and peanut butter thing happens on your friends' phones, and suddenly your Facebook status is floating over your head.
One last thought: Forget about getting un-lost in the city for now. I can't wait to see what games people make with this!
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