New Scientist has an excellent article on "highways in the sky"--an immersive heads-up display that replaces cockpit windows with artificially-generated images of terrain (from radar-based aerial maps) and nearby aircraft. It's also augmented with instrument readouts and nested rectangles that show your projected flight path. At night, in the fog, this technology will probably save a lot of lives.
Technology curves being what they are, there's every reason to suppose that this machinery will one day make it into personal, immersive HUDs. At that point, it'll become possible to augment your world with boring things like reviews that pop up when you stare at the corresponding restaurant or illuminated pathways that guide you through a walking tour.
The interesting applications will come from doing for our eyes what the Walkman did for our ears--replacing (or augmenting) our usual sensory inputs with more pleasant ones. That's right: I'm talking about virtual reality overlays for the physical world. People with "I Brake for Hobbits and Unicorns" bumper stickers (who have always worried me) will populate their augmented worlds with simpering fairy-tale characters. The rest of us will probably people our cityscapes with celebrities who smile warmly as we pass by. If you don't like the architecture of your town, replace it! Convert those strip malls to the Cathedral of Chartres! (Selling the rights to these overlays will be big business.) Our cities will decay around us and we won't care, because all the sidewalks will look like the Yellow Brick Road and all the buildings will be pristine examples of the finest architecture the world has to offer! Toxic waste dumps will become meadows filled with hobbits and unicorns (watch only from a distance), thereby reducing our incentive to clean them up! Okay, maybe this isn’t such a good idea. Try to forget I mentioned it.