Augmented reality–the process of overlaying computer-generated information and imagery on live video–is as good a candidate as any for tech buzzword du jour, and it’s come to the iPhone. As Robert Scoble discovered, the new version of the Yelp application contains an Easter Egg: Shake your iPhone 3GS three times (hard!) and it unlocks a new feature called Monocle.

Moncole uses the 3GS’s camera and compass to let you point the phone at a locale and see Yelp listings for nearby businesses bobbing along on top:

It’s a neat effect, although I’m not sure if it offers any real advantage over a more traditional map view–the Yelp listings are small enough that they’re tough to tap with your finger, and they don’t make clear where the establishment in question is. And as you can see, some of them even get covered up.

As ReadWriteWeb has reported, other existing iPhone apps are adding augmented reality, too. It’s a cool idea even if the first killer app hasn’t arrived, and you gotta think we’ll see increasingly sophisticated use of it. Me, I want to be able to aim my camera at a person I don’t quite recognize and be reminded who they are…

 
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Read more: Apple. iPhone, Augmented Reality, Smartphones, Yelp