Augmented reality systems essentially bring the special effects of movies into more practical uses. Maybe one of the simplest examples are the systems that let you see what your house will look like with the paint scheme you've picked out. More complicated uses might entail overlaying schematics of, say, a hydraulic system, onto the fuselage of an aircraft.
Except in very well-defined environments, however, the use of these systems has been limited to post-production applications. Now, researchers Andrew Davison and Ian Reid of Oxford University have developed a system that layers computer generated imagery onto real-time video feeds. There's even a movie (80 Mb). This opens up some interesting applications. Imagine, for example, a gas or water company van fitted with a heads-up display on the windshield that projects the gas lines onto the field of vision in real time. I'm sure you can think of others.
This is interesting for the pure "wow" effect, but its also an example of the increasingly daunting task faced by corporate IT departments. Adding value to the business involves a lot more than just managing the desktop and other bottom-line tasks--it increasingly means buying, installing, and managing domain specific technologies. CIOs have to be attuned to these opportunities because they're frequently where IT can make the biggest difference to the top-line.