Yelp is a great iPhone app that uses the GPS to find restaurants, shopping and businesses that are close to your location, with reviews out of 5 stars for everything. Yesterday, a new version of Yelp was released with a hidden feature: augmented reality. "Augmented Reality" is a new buzz word which means that data is overlaid on the "real world".
Back to Yelp. If you download the updated version and shake the iPhone 3 times, then you can turn on the "Monocle" feature. Monocle turns on your iPhone's camera, and shows pop-up tags of restaurants (and stuff) over whatever you're looking at. If you spin around, the camera image turns and new business pop ups appear.
Don't believe my ham-fisted explanation, check out the mashable.com page for the youtube video.