Augmented Reality 

                   Augmented reality (AR) is a live direct or indirect view of a physical, real-world environment whose elements are augmented (or supplemented) by computer-generated sensory input such as sound, video, graphics or GPS data. It is related to a more general concept called mediated reality, in which a view of reality is modified (possibly even diminished rather than augmented) by a computer. As a result, the technology functions by enhancing one’s current perception of reality. By contrast, virtual reality replaces the real world with a simulated one. Augmentation is conventionally in real-time and in semantic context with environmental elements, such as sports scores on TV during a match. With the help of advanced AR technology (e.g. adding computer vision and object recognition) the information about the surrounding real world of the user becomes interactive and digitally manipulable. Artificial information about the environment and its objects can be overlaid on the real world.

AndAR - Android Augmented Reality

AndAR is a project that enables Augmented Reality on the Android platform. The whole project is released under the GNU General Public License. This means you can freely use it in any of your projects, as long as you license them under the same license, this means the GPL. As it is a Open Source project any code contributions from you are welcome. ARToolworks offers commercial licensing for the underlying ARToolKit.

Download sample android app here.

Source code here.

Reference Link:
http://en.wikipedia.org/wiki/Augmented_reality
http://code.google.com/p/andar/