Augmented reality might be the future, but my favourite application so far transports you far into past. StreetMuseum - an iPhone app from the Museum of London - overlays 400 years of historic images on today's city streets.
StreetMuseum makes creative use of Google Maps and geo-tagging to show users how London used to look. You can use it to check out pictures and info about nearby historic locations, which is has more of a straightforward walking tour feel. But the fun starts when you're actually standing in front of a location in the database. That's when the AR "3D view" kicks in: