A very cool link came to me via the
PDA's in Education Jiscmail service concerning work at the Graz University of Technology in Austria who are using camera enabled Pocket PC's and Smart-Phones to create augmented reality experiences, i.e. taking an existing image and then augmenting it with information.

Potentially this is a killer app for museum's galleries, tourist guides, etc but also has enormous potential in gaming and learning. To quote some information from their web page:
Handheld Augmented Reality
A standard, off-the-shelf Personal Digital Assistant (PDA) constitutes a cost-effective and lightweight hardware platform for Augmented Reality (AR). A PDA provides a simple, well-known user interface, and is fully equipped with a touch-screen and camera for providing a video see-through Magic Lens metaphor of interaction. In our Handheld AR framework, all interactive processing is done exclusively on the PDA without relying on a server infrastructure, which makes this solution highly scalable. Because of the low cost and suitable ergonomic properties of the PDA platform, massive multi-user AR application become possible for the first time.
It is the goal of this project to demonstrate the first multi-user AR applications with dozens of simultaneous users.
In our Handheld AR framework, all interactive processing is done exclusively on the PDA without relying on a server infrastructure, which makes this solution highly scalable. Because of the low cost and suitable ergonomic properties of the PDA platform, massive multi-user AR application become possible for the first time. It is the goal of this project to demonstrate the first multi-user AR applications with dozens of simultaneous users.
[/size]
More information at:
http://studierstube.icg.tu-graz.ac.at/handheld_ar/