Say you're in Europe, standing in front of some medieval castle. You take a picture of it with your cameraphone and send it via MMS to Spellbinder. Soon you get a message back with your shot, only now there's a giant green fire-breathing dragon guarding the castle's gate. There are no elves in a sweatshop, magically overlaying images on top of your stuff. Rather there's a system that analyzes the shot, matches it to a huge database of other shots, then does what Spellbinder's programmers tell it to do. And it can do a whole lot more.

The same system can be turned into a dueling game: you and your worst enemy put on shirts with barcodes or distinct images on the front and back. At 10 paces, you both draw your digital Elphs and start snapping. He who snaps the most shots of the other guy's sensitive areas—or maybe a iconic flag your enemy was meant to protect—wins. (I assume the tally happens later on, because even with cameraphones, there'd surely be an annoying lag as Spellbinder performed shot-by-shot analysis.)

The freakiest application is a photo-database version of GPS, where you take a picture of, say, the Chrysler Building, and Spellbinder tells you, or your Facebook amigos, where you are.

Since it was just announced at Siggraph in San Diego this week, we don't have any particulars on if, how or when ordinary folks will get to use it, but we've got our fingers crossed. [BBC News]