It all started last month with TwittARound, an application for the iPhone 3GS that uses the GPS, compass and camera to show where Tweets are coming from. As the stunning video below shows, Tweets are overlaid on the landscape, augmenting your view of the world.
Twittaround hasn't made it into the iPhone App Store yet: the iPhone SDK doesn't provide public APIs for manipulating live video. In other words: the app is using parts of the software that Apple hasn't opened up yet. Neither is there an unofficial version of the code available at this point, although there is an open letter that begs Apple to open these parts of the SDK.
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And yet augmented reality Twitter apps may be coming to your phone soon enough. Local Twitter search provider Tweetmondo is teaming up with augmented reality service Layar, the company has announced on its blog, bringing augmented reality Tweets to phones running Google Android. Later, they plan to bring the service to iPhones. They've also posted the video below demoing Layar's existing technology.
So while it'll be awhile coming, augmented reality Tweets might be headed to a phone near you soon.