The Fluid Interfaces research group at MIT is doing some extremely cool things with user interfaces and augmented reality (AR). One is to use a device such as an Apple iPad to make physical objects smarter in the real world. The iPad puts a virtual control on top of the real one and changes the object's functionality over a wireless connection. After the control's functionality has changed, the real object acts differently.
This video demonstrates how a physical radio could be enhanced and controlled with AR:
Once you see how this works, it opens up all kinds of mind-blowing possibilities. I wonder if this is how a 24-year-old Steve Jobs felt in 1979 when an engineer at Xerox PARC demonstrated how to move a cursor across a computer screen with the aid of a device called a "mouse."