if this were anywhere but the iphone ecosystem where ifart is/was all the rage, seb lee-delisle (papervision 3d team, http://www.sebleedelisle.com/) would be absolutely right: "augmented reality has no practical use. but it IS fun."
What's needed is an interface that can convey information but which is not a soak for all of your attention. A 5x8" form factor which is extremely lightweight and daylight readable could be held like a cue-card. Add accelerometer, compass, camera, good contextual voice recognition, and GUI which is easily operated by one thumb, and you have it.
Heads-up displays on your contacts, or direct neural inputs would be dandy. I think we'll get the above before that, though.