Can someone explain how this works? Do they use the GPS + compass to detect what you're looking at or do they actually analyze the image data. I'm thinking it's the former.
The iPhone doesn't have the processing power to do meaningful real-time image recognition.
After all, Google street-view does some simple image processing like that in-browser using JavaScript, and I'd imagine native iPhone code performance would approach that level of power.
Seems like they did a good job of it though. It's really slick.