I've been following the development of augmented reality (AR) with interest over the past couple of years. It's still far from mainstream but a breakthrough could come soon, especially since so many people now own devices that can cope with it. By viewing the world through your smartphone you see extra layers on top of reality. It can be links to more information on a restaurant, historical building, a house for sale and so on. You could see monsters on your street that you have to fight or see instructions on how to work some equipment in front of you.
If you aren't sure of what effects AR is going to have in the future have a look at this amazing film trailer. It's a German film where you play one of the roles and you see the action in AR through your mobile. You have to actually visit the action scenes and your reactions to each situation determine how the film continues. The potential for educational simulations are enormous; for training emergency situations, safety routines, military training etc. Here you can practice situations that simply cannot be practiced in any other way.
For some more thoughts on why all this is relevant to education read a blog post by Vicki Davis, A lesson in simple augmented reality.