Layar combines GPS, camera, and compass to identify your surroundings and overlay information on screen, in real time. It is available for Android now and it will be available for iPhone soon, but exclusively for the 3GS.
The reason is that Layar needs a compass to work, as Maarten Lens-FitzGerald—from developer SPRXmobile—tells us:
We are definitely going for the new iPhone 3GS because of the compass! We're aiming for release after summer, but we depend on Apple accepting it.
I'm sure they won't have any problems. I can't imagine anyone saying no to such cool application— especially not when it makes use of the new magnetometer in the iPhone 3GS. Maarten also tells us that they are planning to make it available for any smartphone with GPS and a compass, which probably will mean the Palm Pre at one point.
But that doesn't matter if you are an Android user: You can download and play with it right now, although it seems that this release is limited to the Netherlands. Once more information layers are released worldwide, Layar will be extremely useful in many scenarios. The most obvious one will be to find your way in unknown places, but it will also be great for real estate and tourism guides. [Layar]