"I knew that!", says the navigator.

Let’s face it: we’re all waiting for the day when our iPhones and iPod touches start identifying the hunk beside that bar or that chick walking on the street by just taking her photo with a camera. While that won’t be possible in the near future (though the Twitter app above allows a bit of room for that), there’s of course the augmented reality (AR) apps in the up-and-coming iPhone OS 3.1, slated to arrive this September.

To put it simply in the context of the iPhone, it combines the usage of the camera, the all-new magnetometer (a.k.a compass), GPS and an Internet connection to give you real-time information on what you see. For instance, you can point at one location and that will give you the nearest road. There are many uses for it, and the possibility is endless.

According to the LA Times post here:

Apple told Acrossair, developer of the Nearest Tube train finder, that the app will be approved for distribution after Apple releases version 3.1 of the iPhone software, which the developer expects will land in early September.

Augmented reality apps can only be used by iPhone 3GS users, though. Boo.