Well, it seems that in its quest to set the bar a bit higher, the NAVIGON folks have managed to integrate their own version of augmented reality into their latest version. It's called Reality Scanner and features an augmented reality view of interesting points of interest around your position. It's definitely a cool idea, and as TUAW points out, it's a feature that you should only use when you're NOT driving.
I've been using NAVIGON products since the time that they were standalone GPS devices, and have to say that this company continues to impress me. Not only can you get a solid GPS app for your region for $35, but the company loads so many features into the app that it's really a no-brainer for you to make it a fixture on your iPhone.