Just read this brief article on the Popular Science website about a project in Europe that uses augmented reality to overlay information on actual places. You can read it and see a video here.
Mobile platforms combined with these sorts of technologies offer tremendous potential for relaying information about the past. Here's what I think would make a neat historical iPhone App. I don't know if it's technologically possible, but given that I can play Myst on my iPod Touch, something similar should be possible with an iPhone.
Reconstruct a virtual place, say a downtown street of a city from a specific time in the past. Photographs could provide information of what the buildings looked like. Old city plans and fire records can provide dimensions and locations on the street. The digitally rendered place should be done to scale.
From what I know of virtual landscapes, a virtual camera is positioned within that digital place to provide a viewpoint. It's location and orientation is used to calculate the view provided.
Correlate that virtual place with the real street. Use GPS data and the digital compass to provide orientation. That data is used to position the virtual camera within the digital landscape.
As one moves down the street and points their mobile device, the GPS and digital compass information changes, altering the view of the virtual world displayed on the screen.
As one moves through their actual location, they can then approximate movement through a historical space by using the view on their device as a portal to that location in the past. This would hopefully have a dramatic effect on one's experience of place and history.
If it were a city street, the user would get an approximation of the proximity of storefronts or houses, along with their look and design. If more information was available about a particular location, perhaps other controls could be added to virtually enter that location and look around. A game could be constructed to provide a narrative goal and directions for moving through the real and virtual space. I think there's a lot of potential here for tourism and historic places.
If any iPhone App developers need a historian for a project like this, my email is on the screen.