Until now, that reality was just a bunch of 2D tags, but with Layar3D it also includes virtual 3D objects. If you have trouble imagining what those might be, just look at the video below. That's right, it's Pacman, and it happens in the real world! Of course, the potential uses for this technology go far beyond gaming, but in our geeky eyes, it all boils down to awesomeness (and, potentially, looking very strange as you roam around, looking at the world through your Android phone).
Here's a bit on how it works: the 3D goodness is created with the help of OpenGL, while the positioning is calculated with the accelerometer, the GPS and the compass of the phone. The application will support live downloading and rendering of 3D objects. These objects will be active, in the sense that you'll be able to assign actions such as "open link" or "play music" to them.
Unfortunately, the new version of Layar is aimed at developers only, with a planned public launch in November. And that iPhone version is still nowhere in sight.